The outcome of the FOMC meeting on June 18th likely will be pretty ho-hum. The committee is on track to taper the QE purchases by another $10 billion and won’t offer new forward guidance about the federal funds rate.
We know the FOMC is thinking hard about its strategy for eventually normalizing policy, but they haven’t reached a consensus, so any announcement probably won’t happen until the fall.
The FOMC will issue a revised set of economic and monetary policy forecasts. Given the data released since their last forecast (in March), projected GDP growth this year will be revised down, the projected unemployment rate at the end of the year will be nudged down, and the projection of inflation could be a tad higher. However, I don’t think their outlook for growth and inflation will have changed by enough to move the forecasts “dots” for the fed funds rate by much.
In short, a meeting that draws a lot of attention but doesn’t move markets.
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