Goldman Sachs on FOMC
We think that the FOMC will skip raising rates at its October meeting but is likely to deliver a second hike in December. A key question for the October meeting this week is how the FOMC will modify the sentence in its statement that refers to the hike at the September meeting. We think it might adapt language from Vice Chair Jefferson’s recent speech to say that further policy adjustments "will depend on trends in the data, the evolving outlook, and the balance of risks.” We do not expect significant new information from the press conference. The seemingly strong support for hiking every other meeting means there is likely a high bar to deviate from that plan through the end of the year, which should limit the impact of Fed communication for now.
We think that the FOMC will skip raising rates at its October meeting but is likely to deliver a second hike in December. A key question for the October meeting this week is how the FOMC will modify the sentence in its statement that refers to the hike at the September meeting. We think it might adapt language from Vice Chair Jefferson’s recent speech to say that further policy adjustments "will depend on trends in the data, the evolving outlook, and the balance of risks.” We do not expect significant new information from the press conference.
The seemingly strong support for hiking every other meeting means there is likely a high bar to deviate from that plan through the end of the year, which should limit the impact of Fed communication for now.