Trading Today - GDP, ECI, Univ. of Michigan, Kashkari
The Q2 GDP figures will be the highlight of the calendar in the U.S. today, but we will also get the Q2 Employment Cost Index and the final July University of Michigan data. Fed President Kashkari is also on the schedule as the blackout period surrounding this week's FOMC meeting ends.
Fed Take: FOMC Holds Rates Steady, Balance Sheet 'Relatively Soon'
*As expected, FOMC maintained the fed funds rate target range at 1.00%-1.25%. Forward guidance still for "gradual increases" in rates, depending on data.
*Balance sheet normalization to begin "relatively soon", but specific timing not announced. The wording would suggest a September announcement is on the table.
*Little change in content of FOMC statement on jobs, inflation expectations. Language on inflation suggested slightly greater concern that lower readings will linger.
Updated SOMA Projections and Operating Protocol Beyond Normalization
In this commentary we update the Fed's normalization schedule using the roll-off caps detailed in the Addendum to the Policy Normalization Principles and Plans. We also take a look at the prospects for policy implementation beyond normalization
Federal Reserve Research
No Peace of Mind for Congress Ahead of Summer Vacation
The House of Representatives is scheduled to recess for summer vacation at the end of this week; the Senate will stay in session for two more weeks. Congress faces a long to-do list for September when it returns, including passing spending bills to avoid a government shutdown and increasing the debt limit.
US Economic Chartbooks
Please see our Economic Week Ahead Chartbook for a discussion of next week's economic releases provided in a visually friendly format that includes graphs, brief descriptions of SMR's forecasts, and links to detailed data previews. If you missed anything from last week, see our Economic Week in Review Chartbook for a look back at the releases with links to full analyses.