The Complete FOMC Cheat Sheet: All You Need To Know

Federal reserveTyler Durden: The data, according to many analysts, have been broadly supportive, with stronger growth and a tightening in the labor market that should allow the Fed to be “reasonably confident” that inflation will gradually return to target.

That said, heightened global risks could lead to a tactical delay. Economists remain evenly split on the prospect of the first rate increase in 9 years.

Fed fund futures price 30% odds of move this mo. and more than 50% chance in Dec.

Barclays (Michael Gapen, Rob Martin, Blerina Uruci)

  • Fed to stay on hold for now, lift rates in March
  • FOMC should delay liftoff as it assesses downside risks to outlook

BMO (Aaron Kohli)

  • “Our core view remains that liftoff is a 2015 event”
  • Whether Fed hikes or not is less important than impact of their “net communication” on mkts; “real question” is whether communication eases or tightens conditions

BNP (economists)

  • FOMC to give dovish projections at this mtg, delay liftoff
  • Yellen to reiterate action later this yr

BoT-Mit (Chris Rupkey)

  • Fed should be “propelled into action” at this mtg
  • U.S. economy remains on track for Fed to raise rates

Brean (Russ Certo)

  • Fed may be ready for rate hike, not mkts

Credit Agricole (David Keeble)

  • Fed Sept. mtg is “very live,” yet may lead to delay in liftoff

Credit Suisse (research analysts)

  • FOMC won’t hike in Sept., may hint at Oct. or Dec.
  • Timing largely contingent on global conditions/financial mkt volatility

DB (Joseph LaVorgna, Brett Ryan, Aditya Bhave)

  • FOMC likely to say prudent course is “to do nothing,” favor waiting to see how economic/financial “landscape” evolve before Oct. mtg

FTN (Chris Low)

  • Fed will choose to raise rates now; officials will agree 25bps is no “big deal one way or the other”

Jefferies (Ward McCarthy, Thomas Simons)

  • Fed will make modest changes to statement, mostly on economic/labor mkt assessment; both should be more optimistic than in July
  • 2015 median dot should decline to 0.375%, suggesting just 1 hike before end of yr
  • Fed will also announce press conferences after each mtg until liftoff

JPM (Michael Feroli)

  • Sept. mtg “very close call,” odds tilt toward liftoff

Macquarie (Nizam Idris)

  • FOMC increase of 12.5bps can’t be ruled out

MFR (Josh Shapiro)

  • Odds are slightly higher of liftoff in Oct. than now
  • FOMC statement should hint “strongly at such a move”

Mizuho (Steven Ricchiuto)

  • Fed may not get conditions needed to hike until 2H 2016

Nomura (George Goncalves)

  • Fed will probably skip liftoff Thursday
  • Officials to say conditions aren’t right to hike

Pimco (Harley Bassman)

  • Fed needs to “remove Hamlet’s cape,” hike now
  • Policy makers have all information they need to act now

RBC (Tom Porcelli, Jacob Oubina, Michael Cloherty, Dan Grubert)

  • Fed, to liftoff, would likely want to nudge mkt odds higher
  • Less than 50% odds, coupled with no new guidance before FOMC mtg, means RBC will have to mark down its own odds of Sept. liftoff

Renaissance (Neil Dutta)

  • Fed most likely to pass on rate increase Thursday; odds of move are 50%

Sberbank (Tom Levinson)

  • “We narrowly favor a hike,” with Fed trying to turn volatile mkt conditions to its advantage
  • Liftoff now may subdue anxiety, signal confidence, improve risk sentiment in 4Q

Scotiabank’s Guy Haselmann

  • FOMC needs to rip “band aid off,” hike already
  • Uncertainty around liftoff has made mkts “untradeable and wildly volatile”

Societe Generale (strategists)

  • Minimal liftoff could bring relief
  • Fed rate increase would deliver positive signal on U.S. economy, remove uncertainty

TD (Millan Mulraine)