The Federal Reserve's Federal Open Market Committee announcement is due at 1800GMT
- will include new quarterly forecasts
- Chair Powell's press conference will follow from 1830 GMT.
Earlier previews can be found here:
- Welcome to Fed week
- Fed preview: Premature celebration?
- Fed could weigh on USD/JPY - Credit Agricole
- FOMC a green light to higher rates and broad USD upside - BofA
- JP Morgan says the main event should be the interest rate forecast "dots."
Some brief snippets from analysts at ...
Rabobank says the FOMC to upgrade its economic outlook and projections - data is improving and new stimulus to kick in
- At the post-meeting press conference, Fed Chair Powell will have a difficult job pushing back against market expectations of higher inflation and earlier policy rate hikes. An upward shift in the dot plot could make his job even more difficult
- Even if the rise in yields in itself would not be a problem to the economic recovery, it could cause cascade effects that would warrant intervention by the central bank
- f pushing back verbally against market pressures does not suffice in the coming days and weeks, the next step for the Fed could be an adjustment to the asset purchase program. If the reflation trade really gets out of hand, the FOMC may be forced to revisit the option of yield curve control
Goldman Sachs look ahead to later this year, early 2022 and say that the FOMC will an ample heads up time period before first tapering - GS see taper beginning in Q4 this year or Q1 2022
- The Fed needs to see substantial further progress on employment and inflation to conclude that tapering is appropriate, which is unlikely to happen until the second half of 2021
- The FOMC's tolerance for any future tightening in financial conditions might be somewhat greater than usual at a time when activity is picking up and powerful growth impulses from reopening, fiscal stimulus, and pent-up savings are set to support the economy all year