Fed is widely expected to leave all monetary policy measures unchanged today. The Fed funds rate target will stay at 0-0.25%. The asset purchases program would also remain unchanged at USD 120B per month. It’s not expected to start talking about tapering yet, and could wait until the Jackson Hole Symposium to give a more solid indication.
The main focuses would be on the updated economic projections, which would reflect Fed’s view on the path of inflation, as well as policy rates. Back in March, the dot plot indicated that the majority of policymakers forecast that the first hike would come in 2024. There were 4 members anticipating a rate hike next year and 7 by end -2023. While it might not be easy to push forward the forecast to 2023 (3 more members are needed), just 2 more could leave it balanced (9 vs 9) on whether it is 2023 or later.
Some suggested previews here:
- FOMC Preview – Too Early to for Tapering while Surge in Inflation is More Imminent
- Mixed US Retail Sales and PPI Won’t Help the FOMC “Taper Talk” Decision be Any Easier
- Fed Meeting: No Taper Talk, But Mind the Dots
- FOMC Meeting Preview: Will the Fed Fret about Inflation?
- June Flashlight for the FOMC Blackout Period
