Analysts at BAML offer a sneak peek at what to expect from the November FOMC monetary policy decision due later today at 1800GMT.
Key Quotes:
We don't expect fireworks. Since we will only receive the statement and not an updated Summary of Economic Projections or press conference, there are few opportunities for the FOMC to send a signal to the markets about the future direction of policy. Importantly, we do not expect the Fed to explicitly signal a hike in the upcoming meeting on December, as the market is already pricing in an over 80% probability of a hike.
There will likely be small language changes, particularly in the first paragraph regarding the economic outlook.
It is likely that the FOMC notes that the data have been volatile due to disruptions from the hurricanes and that the Committee is not reacting to such short-term fluctuations. We think they will reiterate that "past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term."
We do not expect changes to the characterization of inflation or the risk statement. The FOMC is likely to maintain the language that "near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.
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