Credit Agricole CIB Research discusses its expectations for next week's September FOMC policy meeting.
"We think that the FOMC may be only a month or so away from announcing QE taper and think that the updated staff economic projections and the Fed Chair Jerome Powell’s press conference would convey the message that the US recovery is becoming more durable. In addition, the updated Fed ‘dot plot’ would be scrutinised for any signs of more aggressive monetary tightening in the medium- to long-run. We think that the market impact from the meeting next week will depend on how investors perceive any signal that cautious policy normalisation is on the way," CACIB notes.
"We therefore think that the more lasting impact from next week’s policy meetings would be to weigh on global risk sentiment, especially if the Fed departs from its usual ‘patient’ message on QE taper and this gives the high-yielding safe haven USD a boost," CACIB adds.