Some of the chatter about the Fed meeting this week is beginning to do the rounds and there’s a strong consensus: The Fed isn’t going to do anything.
- JPMorgan says it will be “uneventful”
- BAML sees a “no news” meeting
- RBC believes there will be little fanfare and little scope for surprise
- HSBC sees no change in the statement except for fine tuning
- Goldman sees minor upgrades to growth and employment but very little overall
One of the few firms to see the potential for change is Morgan Stanley. They say to watch this part of the statement:
The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.
They warn on the chance the Fed could remove the word ‘considerable’, something that could mean a hike about 6 months after the October taper.
