by Calculated Risk on 6/19/2013 07:57:00 PM

Another take on the FOMC statement and Bernanke press conference from Goldman Sachs' economists Jan Hatzius and Sven Jari Stehn:

The FOMC was more hawkish than we had expected. First, Chairman Bernanke suggested that tapering would start “later” this year and might conclude in mid-2014 assuming a 7% unemployment rate at that point. Second, the committee moved down its unemployment rate forecasts by about 0.2 percentage points throughout the forecast horizon. Third, the committee noted that downside risks had “diminished” since last fall ... Fourth, although inflation projections moved down, the chairman was somewhat dismissive of the recent inflation drop, attributing much of it to special factors. Fifth, the chairman was a bit more reluctant to push back on the increase in short-term rate expectations than we had expected, although he did state explicitly that the 6.5% unemployment threshold might eventually move down.

Our takeaway is that the risk to our forecast of QE tapering starting in December has increased. However, our own GDP forecast for the second half of 2013 is more than ½ percentage point below the committee’s, and our labor market forecasts are also less optimistic.

Thursday economic releases:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for an increase to 340 thousand from 334 thousand last week.

• At 9:00 AM, the Markit US PMI Manufacturing Index Flash for June. The index was at 52.3 in May.

• At 10:00 AM, the Existing Home Sales report for April from the National Association of Realtors (NAR). The consensus is for sales of 5.00 million on seasonally adjusted annual rate (SAAR) basis. Sales in April were at a 4.97 million SAAR. Economist Tom Lawler is estimating the NAR will report a May sales rate of 5.2 million. A key will be inventory (especially the year-over-year change) and the months-of-supply.

• Also at 10:00 AM, the Philly Fed manufacturing survey for June. The consensus is for a reading of -0.5, up from -5.2 last month (above zero indicates expansion).