The FOMC meet July 25 and 26; I posted two previews already but here is one from GS
(Earlier:
- Is it next week yet? Morgan Stanley on the upcoming FOMC meeting
- The FOMC meet this week, Reuters ask: Global Turning Point in Monetary Policy ?
)
Goldman Sachs economics from their client note (this is a summary):
- We do not expect any policy changes at the July FOMC meeting and expect only limited changes to the post-meeting statement.
- The statement is likely to upgrade the description of job growth, but might also recognize that inflation has declined further.
- We think the statement is also likely to acknowledge that the balance sheet announcement is now closer at hand.
Looking ahead,
- we continue to expect the FOMC to announce the start of balance sheet normalization in September.
- We see a 5% probability that the next rate hike will come in September, a 5% probability that it will come in November, and a 50% probability that it will come in December, for a 60% cumulative probability of at least three hikes this year.
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And, just two key items of focus:
- Investors will likely focus their attention on possible changes to the language describing inflation and the timing of balance sheet normalization.
- The other key question about the July statement is whether the FOMC will change the paragraph describing balance sheet policy.