by Calculated Risk on 12/09/2017 05:23:00 PM

The FOMC meets on Tuesday and Wednesday, and almost all analysts expect a rate hike this week. Here are a few brief excerpts from a Goldman Sachs research note:

With the FOMC almost certain to deliver the third rate hike of 2017 at its December meeting next week, attention is instead likely to focus on the outlook for 2018 and beyond and in particular on how the Fed will react to a tax reform that now appears likely to become law.

The economic data have improved slightly on net since the FOMC last met in early November. Growth momentum has remained strong, the unemployment rate has fallen further, and the latest inflation data were encouraging. Meanwhile, financial conditions have eased once again, as they have in the aftermath of each Fed tightening action so far in this hiking cycle.

In light of both the stronger growth momentum and the prospect of tax cuts, we expect the Summary of Economic Projections to upgrade GDP growth in 2018 and 2019 and to mark down the unemployment path by two-tenths to 3.9%, offset only partly by a one-tenth reduction in the longer-run unemployment rate to 3.5%. We expect the 2018 inflation projections to remain at 1.9% ... we continue to expect four rate hikes next year

CR Note: I think FOMC members will wait until the tax cuts are passed before including the possible impact in their projections.