The FOMC meeting is coming up on July 28-29 next week - some preview notes from Goldman Sachs in brief.

  • Short-term interest rate markets imply a zero probability that the committee will raise policy rates next week, but show a high likelihood of at least one hike before the end of the year
  • While a change of policy is very unlikely, watch the upcoming statement for any clues on the precise timing of liftoff
  • Goldman Sachs still see December as most likely lift off date

Goldman Sachs are watching 3 main items:

  • The description of economic conditions will likely acknowledge the decline in the unemployment rate. We expect the statement to drop its prior reference to stable oil prices, but to leave other comments about inflation unchanged
  • Goldman Sachs do not expect additional language intended to prepare for rate hikes in the statement. In 2004 the FOMC used the "measured" phrase for this purpose, but Fed Chair Yellen downplayed the need for new guidance at the June press conference. A change along these lines is a risk for next week, however
  • Don't expect dissents, but see them as a risk from President Evans (dovish) and President Lacker (hawkish).