The Federal Open Market Committee Minutes for for the July meeting are due at 1800GMT
Previews ... (bolding mine)
Barclays:
- We expect the minutes of the July FOMC meeting to provide further information regarding the timing of balance sheet normalization and the degree of consensus within the committee.
- We think balance sheet normalization will likely start in September and the hurdle is quite high for the FOMC to deviate from what it has been signaling so far.
- We will also look for more detail on how concerned the FOMC is with the incoming data on inflation.
- Although we think concern has risen, we do not believe there is sufficient worry yet to derail a likely December rate hike.
HSBC:
- In July, the FOMC left the target range for the federal funds rate unchanged at 1.00%-1.25%. The Committee announced in its policy statement that it expected to begin shrinking the Fed's balance sheet "relatively soon."
- We expect the FOMC to formally announce the disinvestment program at its next policy meeting in September and to commence the program in October.
- We expect the next 25bp hike in the federal funds rate to come in December.
- In July, the FOMC repeated that it expected inflation on a "12-month basis" to remain below 2% in the near-term but to stabilize around 2% over the medium term. The July minutes are likely to show extensive discussion about the slowdown in inflation over the past several months. Some of the policymakers likely held to the view that diminishing labour market slack should eventually put upward pressure on inflation. Others may have argued the FOMC should be cautious with respect to additional policy rate hikes unless the inflation data start to pick up.
