Goldman: FOMC Preview

CR Note: The FOMC is scheduled to meet on Tuesday and Wednesday. No change to rates is expected at this meeting, but the FOMC is expected to announce the beginning of the process to reduce the Fed's balance sheet.

A brief excerpt from a research note by Goldman Sachs economists:

We expect the FOMC to officially announce next week that balance sheet runoff will begin in October. As the Fed has already communicated extensively about its plan for a gradual and predictable runoff, we expect markets to focus instead on the outlook for the federal funds rate. The key question is whether the committee’s expectations for the federal funds rate have declined in light of the surprising deceleration in the inflation data since the start of the year.