Goldman Sachs Economics Research note with a preview of the Federal Open Market Committee meeting this week.

The key points from Goldman's note:

We expect the FOMC to raise its target range for the federal funds rate to 0.25-0.50%

  • With this action essentially priced in, focus will be on the committee's policy guidance for 2016 and beyond

We expect three main changes to the post-meeting statement

  1. We expect the committee to upgrade its description of the labor market in light of firmer payroll growth
  2. We expect the statement to remove some of its relatively cautious language on inflation
  3. We look for the statement to show a clear baseline for additional rate hikes-it will not signal "one and done"

Fed officials regularly describe the likely pace of rate hikes as "gradual"

  • We do not expect this term to appear in the statement itself
  • From the press conference guidance and the Summary of Economic Projections (SEP), the gradual message should be all but explicit

We are looking for only modest revisions to the economic projections in the December SEP

  • Median core inflation forecasts could decline slightly

The "dot plot" could prove more interesting

  • For 2016, we expect a number of officials' funds rate projections to move lower, but for the median to remain at 1.25-1.50%
  • Beyond 2016 we think the odds favor a reduction in the median longer-run funds rate projection from 3.50% to 3.25%
  • We also see 0.25pp reductions for both the 2017 and 2018 medians

Chair Yellen's press conference should offer a cautious message

  • We expect her to underscore that policy is not on a preset course ... pace of rate hikes will be highly sensitive to incoming information-including economic data as well as financial conditions

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The note is detailed, but the above are the main points to watch from in the announcement, the statement, the projections and Yellen's presser.

The even quicker version is:

  • Hike to be announced
  • Its widely expected
  • This is not a one-off hike, there will be more subject to incoming data on the economy and financial conditions
  • The pace of subsequent hikes will be slow
  • The economic outlook is for subdued growth