Goldman: FOMC Preview

A few excerpts from a piece by Goldman Sachs economists Zach Pandl and Jan Hatzius

• We expect the statement following next week’s FOMC meeting to remain relatively upbeat about US growth prospects ... However, the committee is very unlikely to raise the funds rate. ...

• To keep markets on notice for a possible rate hike in December, we expect the statement to indicate that the committee is considering action “at its next meeting”—although this is a close call. The statement will likely again say that risks to the economic outlook are “roughly balanced”.

• A statement along these lines should keep the committee on track to raise the funds rate at the December meeting. We see a 75% chance of an increase, roughly in line with market expectations. The remaining uncertainty relates to incoming economic data and financial conditions ... conditional on decent data and stable markets, a December rate hike looks very likely.

CR note: The next FOMC meeting is next week, on November 1st and 2nd and it seems very unlikely there will be a change in policy at this meeting.

from
http://feedproxy.google.com/~r/CalculatedRisk/~3/awu14OwIxzQ/goldman-fomc-preview.html