CIBC Research discusses its expectations for tomorrow's FOMC policy meeting.
"The statement will likely strike a more dovish tone than the prevailing market sentiment. Officials will reiterate that the recovery will be slow, even after an apparently quick start in May. That dovishness will likely be front-and-center in the accompanying projections and dot plot which are expected to reappear after being bypassed in March," CIBC notes.
"Fiscal policy, as Chairman Powell has repeatedly mentioned, provides a more acute response than monetary policy is capable of achieving. The FOMC will want to see how developments play out before committing to ‘go it alone’. The Summary of Economic Projections (SEP) should be released at this meeting, and will help provide clarity on the shape of recovery the Fed see’s, and where they now see r-star. Even if our base-case proves correct (i.e. no additional stimulus tomorrow), we believe that U.S. 30yrs offer more value than their Canadian equivalent," CIBC adds.