Quick thoughts on the Federal Open Market Committee outcome from GS

Fed hints at September balance sheet announcement.

The FOMC left policy unchanged yesterday and made slight tweaks to the post-meeting statement.

  • It upgraded the description of job growth to "solid, on average,"
  • downgraded the description of household spending a touch following a weak retail sales report,
  • and acknowledged that inflation is now running "below" instead of "somewhat below" the 2% target.

The statement also noted that the Committee expects to begin balance sheet normalization "relatively soon", supporting our expectation of an announcement at its next meeting on September 19-20

That's a pretty good 'in a nutshell' set of takeaways from GS.

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On their top trades for 2017, Goldman Sachs says:

  • TopTrade #6: Stay long EURO STOXX 50 2018 dividends (BBG: DEDZ8 Index) for equity-like 'carry' with little duration risk; target 125, now at 123.0, entry on November 17 at 111.9, stop at 105

(GS add: Longer-term structural views are expressed in our Top Trade recommendations. These are typically managed with a wide stop, and assessed on the basis of whether the fundamentals continue to support the medium-term investment theme.)