Goldman Sachs Federal Reserve FOMC preview

Adam posted a great FOMC preview earlier:

The expectation is for a rate hike, as close to a unanimous expectation you could get.

GS is down with that. But, there is more to watch out for says the bank:

The FOMC looks very likely to raise rates at this week’s meeting, the first with Chairman Powell at the helm.

  • With tax cuts now implemented and an additional boost from higher federal spending this year, we believe most participants are embracing the “from headwinds to tailwinds” narrative.
  • Reflecting this, encouraging growth data, and further evidence that core inflation is moving back to target, we expect a slightly hawkish tone 
  • Public remarks by Fed officials suggest a broad shift in the committee’s outlook towards a potentially faster pace of tightening, and we expect the median dot to show four hikes in 2018, up from three at the December meeting.
  • Additional hawkish changes-a move to three hikes in 2019 or an increase in the longer-run funds rate estimates-are also possible but not our base case.

(bolding mine)

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.