JP Morgan see a Federal Reserve peak rate to 5% in Q1 next year

Responses to the US CPI data continue inbound.The data, ICYMI:

• US November CPI +7.1% y/y vs +7.3% expected

Earlier response posts:

• Slower than expected rise in US CPI adds to the case for a sooner, lower terminal rate
• Goldman Sachs FOMC preview - expect a higher peak rate projection, and larger cuts in 2023

• Timiraos: Fed on track for 50 bps tomorrow but lower inflation could complicate 5% target

JPM now:

• market has cut back its pricing of the terminal (peak_) Fed Funds rate
• but the strong jobs market means the majority of Federal Open Market Committee (FOMC) members will remain more concerned about doing too little than too much

Thus:

• "we continue to see the Fed hiking to 5% in 1Q23"

FOMC statement is due at 1900 GMT, Powell presser at 1930 GMT.