The Federal Open Market Committee meet on Tuesday nad Wednesday (12-13 December 2017)

Comments from the GS preview (in brief):

FOMC almost certain to deliver the third rate hike of 2017

Attention is likely to focus on the outlook for 2018 and beyond

  • In particular on how the Federal Reserve will react to a tax reform that now appears likely to become law

The economic data have improved slightly on net since the FOMC last met in early November

  • Growth momentum has remained strong
  • Unemployment rate has fallen further
  • The latest inflation data were encouraging

Financial conditions have eased once again, as they have in the aftermath of each Fed tightening action so far in this hiking cycle

In light of both the stronger growth momentum and the prospect of tax cuts

  • We expect the Summary of Economic Projections to upgrade GDP growth in 2018 and 2019
  • And to mark down the unemployment path by two-tenths to 3.9%, offset only partly by a one-tenth reduction in the longer-run unemployment rate to 3.5%
  • We expect the 2018 inflation projections to remain at 1.9%

We continue to expect four rate hikes next year