FOMC preview: not expecting any substantive guidance - Nomura

Analysts at Nomura offered a short preview of the FOMC meeting.

Key Quotes:

"We expect the primary messages from the 19-20 September FOMC meeting to focus on the commencement of the balance sheet roll off in October. That said we do not expect any additional substantive guidance or details than what has already been provided. Instead, major decisions involving the ultimate size of the balance sheet and its composition will rest with future Fed leadership, in our view. 

Based on incoming data and the performance of the economy, we expect only several modest changes to the Summary of Economic projections (SEP) compared to June, with the median forecasts for inflation for 2017 and 2018 being marked down in response to the recent weakness in inflation. 

We also expect the median longer-term federal funds rate to tick down below 3% as members revise down their views of the terminal rate. We expect the statement and press conference to contain only minor changes in language about the path of short-term rates. That is, we do not expect the statement or the press conference to be hawkish or dovish about a possible hike in December. Instead, over the next several months until the December meeting, we expect more vocal debates over the causes of weaker-than-expected-inflation and the role that financial conditions should play in policy decisions."