The Federal Reserve's Federal Open Market Committee monetary policy minutes are due ahead of Chian Powell at Jackson Hole

Powell coming up on Friday

I have a few previews already up:

This via RBC:

  • The FOMC Minutes should bring little new information in terms of the pulse of the economic backdrop or the pace of Fed rate hikes. Indeed, the press statement came and went with few changes overall. The Fed did upgrade its assessment of the backdrop slightly, from "solid" to "strong", but this is not significant enough to warrant a shift in expectations about the policy path. Growth is humming along and "gradual" rate increases remain the base case for this Fed.
  • The most interesting part of the Minutes will be about the balance sheet outlook. Unfortunately, recent speeches by FOMC members suggest that there is not yet a strong consensus, so we think that at most we will see the various options being laid out.
  • Eventually, we expect the Fed to adopt a large balance sheet approach, meaning that it will need to stop runoff in early 2019 if reserves are exempted from the Leverage ratio or early 2020 if they are not.
  • In addition, we might see a broader discussion on the 20bp move in IOER in June. We think that is an option for the Fed one more time-pushing IOER and RRP too close together will be destabilizing when banks are under LCR stress (volatile RRP means volatile reserves, which is problematic when banks are close to LCR limits).