Preview of today’s Federal Open Market Committee meeting (yes, MOAR!)

Expectations are low for anything much at all out of the FOMC todayI posted this preview earlier: 

  • Its FOMC day! Preview of Federal Open Market Committee meeting.

And this one way back last week:

  • FOMC preview

But, as promised in the headline to this post … MOAR! (bolding mine)

  • We expect the FOMC to leave its target range for the federal funds rate unchanged at 1.00%-1.25% at the November meeting as it continues to evaluate to what degree recent disinflation is temporary or persistent. The committee, in our view, is likely to look favourably at the underlying components of the Q3 GDP report which showed a positive contribution to growth from both net exports and inventories; we see trends in these categories as reflecting the synchronized global growth backdrop. Distortions to domestic data from the hurricanes that made landfall in August and September are likely to be ignored.


  • There are unlikely to be any major policy surprises delivered at this meeting, we continue to expect the next 25bps rate hike to come in December. The policy statement may repeat that Hurricanes Harvey, Irma, and Maria disrupted near-term economic activity but are unlikely to impact the medium-term outlook for the economy. The statement will also likely reiterate the Committee’s view that inflation may remain somewhat below 2% in the near term but should stabilise close to 2% over the medium term. It is possible the policy statement released after this meeting will note that the balance sheet normalisation programme has commenced.


  • On the FOMC statement, practically speaking there is little that needs to change. There were no significant economic developments over the intermeeting period, balance sheet tapering is on automatic pilot (at least for the time being), and the next hike (which the market seems fully braced for) will not come until December. This all suggests no material changes to the statement.

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