The FOMC’s Discussion of the Normalization Process
At the July 29/30 FOMC meeting the discussion of the normalization process evolved further. President Eric Rosengren characterized the discussion as being "almost at the point (of agreement)". We suspect at today's meeting the Committee will be presented with a menu of two or three options, of which they will select one. From the Minutes of the July 29/30 Meeting there were a number of points of agreement. We suspect that the selected approach will take account of these key points.
Federal Reserve Research
FOMC Preview for Sept. 16-17 - Change in Forward Guidance Not a Certainty
* A seventh $10 billion cut in the size of the asset purchase program is a virtual certainty.
* Committee likely -- but not guaranteed -- to adjust the language of the forward guidance away from the "considerable time".
* Assessment of economy likely to be cautiously upbeat; watchful of geopolitical risks.
* Two vacancies on the Board means 17 participants to contribute to the Summary of Economic Projections, not full 19.
Trading Today - PPI, TIC ... Waiting On FOMC
August PPI figures will be released first thing this morning, and the TIC data for July will be released late this afternoon, but neither should be particularly market moving as trading today will be dominated by positioning in front of tomorrow's FOMC decision.
Today Is SMR Survey Day!
SMR will conduct the weekly survey of SMR money managers today. Responses can be entered at the link here. Summary data will be proprietary to SMR clients. The results will be presented on Wednesday. Thank you for your participation!
Portfolio Manager Survey
Fixed Income Focus: Yield Rise Continues Despite Decent Auction Demand
Treasury yields were hit hard across the curve this past week, with yields up between 12 and 14 basis points from the 3-year on out in late Friday morning trading.
The week's coupon actions went quite well overall. Both the 3-year and 10-year auction results were fairly vanilla, but the bond auction found very strong demand to cap the week.
Fixed Income Focus