FOMC to keep guidance language little changed - RBS

FXStreet (Bali) - RBS narrowly favours the FOMC keeping its guidance language little changed this week.

Key Quotes

"The FOMC decision this week includes updated forecasts, including 2017 forecasts for the first time, and a press conference by Chair Yellen."

"The debate at the FOMC appears to have become more nuanced on the appropriate outlook for monetary policy, and the forward guidance language is likely to evolve at some point to more fully reflect a data-dependent outlook."

"Among the key debates at the FOMC meeting will be whether that change should happen at the September meeting, prior to the end of the QE taper, or following the conclusion of the taper in October."

"We narrowly favour the FOMC keeping its guidance language little changed this week, perhaps frustrating to those anticipating a more wholesale, USD positive change in sentiment and tone."

"While that may be seen as a near-term disappointment relative to heightened expectations, the US economy is still outperforming relative to the G4."

"That should keep longer-term expectations for a less dovish Fed alive, even if it is delayed by a few months."