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

Yesterday I posted the Goldman Sachs preview of this week's FOMC meeting

This one now via Barclays:

The FOMC is widely expected to increase the federal funds target range 25bp ... a move that has been clearly telegraphed by FOMC members and should provide no surprises

  • The committee appears confident it is nearing its full employment mandate, but is somewhat more cautious on inflation.
  • We expect the Fed to stay the course on policy tightening next year, and it could even accelerate the pace somewhat from our baseline scenario of two hikes.
  • Labor markets are improving faster than anticipated, and FOMC members are playing catch-up with their projections of the unemployment rate (UR). In September, they projected that the UR would decline to 4.1% by Q4 18, a threshold reached already by October 2017.
  • In addition, the FOMC will likely be concerned that a prolonged period of extraordinarily accommodative monetary policy will lead to imbalances in financial markets and is somewhat concerned about financial stability risks.
  • Finally, with looming tax cuts that are likely to boost demand but not enhance potential growth, FOMC will likely also be concerned about overshooting inflation in the medium term.

Summary of economic projections (SEP)

  • We expect a lower path for the UR, marking it closer to the actual data; think the growth projections for 2018 should be revised slightly higher in light of strong momentum in activity at the end of this year; and believe inflation projections will be broadly unchanged.
  • There is likely to be a discussion of the upside risks to the growth and inflation outlooks from the recently passed tax bill, but its effect on the macro economy will likely be included in the official SEP tables only once a final version of the bill has been approved and signed by the president.