FOMC looks very likely to keep policy unchanged next week – Goldman Sachs

Goldman Sachs economists Zach Pandl and Jan Hatzius present an early preview of the first FOMC meeting for 2017 due next week on Jan 31 – Feb 1, with the policy decision due for announcement of Feb 1 at 1900GMT.

Key Quotes:

“FOMC looks very likely to keep policy unchanged”

“Should make only modest revisions to the post-meeting statement”

“We expect constructive comments on economic activity, assuming GDP growth for Q4 is in line with or better than our +2.2% forecast.”

“The committee will probably keep its description of inflation trends roughly unchanged, but it may acknowledge that headline PCE inflation should reach 2% relatively soon (instead of "over the medium term").”

“We look for the balance of risk assessment and the characterization of current policy ("accommodative") to remain unchanged.”

“The statement will likely leave out any explicit mention of fiscal policy for the time being.”