I posted earlier on Goldman Sachs thoughts on this week's Federal Open Market Committee meeting: Its FOMC week - preview from Goldman Sachs (spoiler, expect a hike!)
This now from BoA / ML ... in brief. Some quite interesting points made in this (any bolding is mine):
Most obviously, we think the Fed will hike rates by 25bp, as widely expected
It is possible - although quite unlikely - that a very weak CPI and retail sales report the morning of the 14th would discourage the Fed from delivering a hike. More likely, however, is that weak reports would influence the language in the statement and press conference
The FOMC is likely to note that the pace of job growth has slowed while the unemployment rate has continued to decline
pointing to solid labour market fundamentals.
expect the Fed to maintain language that indicates that the weakness in growth at the start of the year was likely transitory and activity is expected to accelerate
The language will note that inflation has moved below target, but should continue to trend toward 2%. We expect a number of changes to the projections
There will be particular interest in the outlook for inflation - expect the median forecast for core PCE inflation to shift down to 1.7% for this year but ... that the median will stay at 2.0% for 2018
The press conference to be focused on balance sheet normalization
Chair Yellen is likely to be asked about the specifics of the balance sheet policy and to elaborate on the potential timing of implementation
Yellen to note that the recent weak data on inflation is likely transitory, but she may provide some hints that she has become a bit more concerned.
Reference: Forex Live
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