US: Sep FOMC meeting in focus today - Westpac

It has been a tumultuous month for the US economy and indeed the FOMC, with Vice Chair Fischer announcing his resignation effective October 2017, according to analysts at Westpac.

Key Quotes

“This decision will have no impact on the September meeting, the formal starting point for balance sheet normalisation. At the end of this meeting, a specific date will be given at which time the already outlined plan of the FOMC will be put into action. It is intended that this will reduce the balance sheet by around USD2trn over the next five or so years.”

“For the outlook, the more important output of the September meeting will be revised forecasts. The two particular areas of note will be the forecasts for inflation and for the fed funds rate, which recent communications indicate might come under pressure. We retain our December 2017; June and December 2018 rate hike view.”