Wednesday 1 November 2017 ... and you know what that means - yes its Federal Reserve day!

Its expected to be a fizzer, but here are 3 bank previews anyway

BAML:

  • We don't expect fireworks. Since we will only receive the statement and not an updated Summary of Economic Projections or press conference, there are few opportunities for the FOMC to send a signal to the markets about the future direction of policy. Importantly, we do not expect the Fed to explicitly signal a hike in the upcoming meeting on December, as the market is already pricing in an over 80% probability of a hike.
  • There will likely be small language changes, particularly in the first paragraph regarding the economic outlook.
  • It is likely that the FOMC notes that the data have been volatile due to disruptions from the hurricanes and that the Committee is not reacting to such short-term fluctuations. We think they will reiterate that "past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term."
  • We do not expect changes to the characterization of inflation or the risk statement. The FOMC is likely to maintain the language that "near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely."

Deutsche Bank:

  • With market expectations running very much in line with the FOMC's latest median projection of a rate hike in December, the FOMC will have little reason to either amplify or alter its message in the November statement.
  • We expect an uneventful outcome, with primary focus on the tea leaves in the first two paragraphs: i.e, in how the Committee sees recent and prospective economic developments. On balance, we expect that the economic picture has not changed enough to alter the Committee's central expectation that it will be raising rates another 25 bps in December, and recent Fedspeak from Chair Yellen and others has not tried to modify that perception. With inflation still running low, we expect the statement to continue to say that "the Committee is monitoring inflation developments closely," and in our post-meeting assessment, we will take a look at what it might take to change the expected outcome for December.

UBS:

  • We expect the FOMC to keep the fed funds rate unchanged at the upcoming November meeting and to make only modest changes to the FOMC Statement.
  • While the last SEP gave guidance for one more hike in 2017, the FOMC would need overwhelming urgency to hike at a non-press conference meeting.
  • Recent Fedspeak has shown an eagerness to move at the December meeting, but given the touch more concern about low inflation relative to earlier this year, participants would likely prefer to see some more evidence of inflation rising before moving again. Our call remains for a rate hike in December with two more hikes in 2018.

I bolded bits and bobs for emphasis