Federal Reserve the focus for today, an earlier preview here:
A couple of quick ones, in brief from:
BNZ:
- A 25bps rate cut is well priced
- focus will turn to the language used by Fed Chair Powell. As in his Jackson Hole speech, we expect language around "trade uncertainty" to get widespread airing and the path of monetary policy from here shouldn't be locked down too hard, with an easing bias likely to clearly remain in force.
- The dot plot of the projected Fed Funds rate is expected to show at least one more 25bps cut, probably before year-end, well short of current market pricing which shows another 1½ rate cuts through next year.
UBS:
25 bp cut expected
- expect the same two dissents: George and Rosengren
Lower dot-plot path, a two-cut median in 2019, but no change to longer run
The statement will be slightly downgraded
- to acknowledge the contraction in business investment spending
- We suspect they will also qualify the sentence that says "the labor market remains strong" we think the statement will say that "uncertainties about the outlook have increased" because of the escalation of the trade war and the global economic outlook
press conference
- We expect Powell to highlight the three themes listed in the July minutes about why they cut rates: uncertainty from the trade war, the global outlook, and low inflation. The last seems to be fading in intensity, but the first two are more pressing
