Barclays Research discusses its expectations for this week's FOMC January policy meeting on Wednesday.
"The FOMC will seek to strike a balance at its January meeting between remaining constructive about the underlying strength of the US economy while pledging that they are in no rush to push short-term rates higher. Consequently, we expect the committee to keep the target rate for the federal funds rate unchanged in January, and then most likely again in March. Nonetheless, we still expect inflation outturns to firm around midyear, and we retain our forecast that rates will be notched up in June, December, and then in mid-2020.," Barclays projects.
"With changes to the policy stance off the table, we expect the committee’s attention to revolve around 1) how to adjust the statement’s characterization of the data; 2) how to adjust forward guidance; and 3) formalizing its balance sheet normalization policies," Barclays adds.