2017 Economic Calendar
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FOMC Meeting Announcement  
Released On 9/20/2017 2:00:00 PM
PriorConsensusConsensus RangeActual
Federal Funds Rate - Target Level1.00 to 1.25 %1.125 %1.00 % to 1.25 %1.00 to 1.25 %

Highlights
As expected, the FOMC announced the unwinding of its $4.5 trillion balance sheet beginning in October. There is no change in the funds rate which stays at a range of 1.00 to 1.25 percent. For unwinding, the committee is holding to its June statement and will allocate rollover amounts across maturities based on the proportions it holds. Unwinding, which will take several years to unfold, will begin gradually at a $6 billion cap (limit) for Treasuries and $4 billion for mortgage-backed securities. The caps will increase in 3-month intervals by $6 billion for Treasuries and $4 billion for mortgage-backed securities until they reach $30 billion per month for the former and $20 billion for the latter.

The economic assessment is also steady with job growth said to be continuing and economic activity described as moderate. Temporary hurricane effects are cited and include a rise for gasoline prices though the inflation outlook remains unchanged, running somewhat below their 2 percent goal.

Quarterly FOMC forecasts continue to see one more rate hike this year with median projections unchanged for 2017 and 2018 at three 25 basis point hikes penciled in each year, to 1.4 and 2.1 percent respectively. There is a change to 2019 which is trimmed back to a median 2.7 percent from 2.9 percent with the long run call cut back 2 tenths to 2.8 percent. Median projections for 2017 GDP growth are up 2 tenths to 2.4 percent with GDP seen slowing to 2.1 percent next year followed by 2.0 in 2019 percent and 1.8 percent in 2020. The unemployment rate is seen unchanged from June forecasts at 4.3 percent this year with 2018 and 2019 each cut 1 tenth to 4.1 percent. Core PCE inflation is cut 2 tenths this year to 1.5 percent and 1 tenth next year to 1.9 percent. The core is seen at 2.0 percent in both 2019 and 2020.

There are dovish elements in the results including the downgrades for future inflation, but the initial response to the statement is hawkish given unchanged projections for rate hikes in the remainder of this year and for next year. Demand for Treasuries is falling in response to the announcement with the 2-yield up 6 basis points to 1.44 percent. The dollar is moving higher. The vote was unanimous at 9 to 0.

Consensus Outlook
No rate hike is expected at this month's Federal Open Market Committee meeting but the beginning of balance-sheet unwinding is a distinct possibility. Debate at the meeting will center on the path of inflation, which has been soft but did show life at the core level in August, and possible economic risks due to Hurricanes Harvey and Irma. Caution over either issue could delay balance-sheet unwinding to another meeting. Whatever the decision, wording and updates on unwinding will be closely watched. For rates, all forecasters see the FOMC holding the federal funds target at a 1.00 to 1.25 percent range with a 1.125 percent midpoint.

Definition
The FOMC meeting announcement is a policy statement issued at the conclusion of each meeting of the Federal Open Market Committee. It offers updates on economic conditions with special focus on the health of the labor market and the latest on inflation. It also updates the status of the federal funds target which is the FOMC's official policy interest rate. This rate is expressed within a range, such as 1.75 to 2.00 percent. The center of this range is the implied target. The higher this target, the more restrictive monetary policy becomes, the lower this target, the more accommodative policy becomes. Other policy tools are also discussed in the meeting announcement including updates on direct purchases of Treasuries and mortgage-backed securities. Debate is not offered in the statement, just the consensus view is expressed, though the statement does list the total committee vote and how each member voted.  Why Investors Care
 
[Chart]
The Fed closely monitors the core PCE price index to indicate whether or not policy is approximately correct, overly accommodative, or too restrictive. The PCE price index is preferred to the CPI because it is more closely aligned to the cost of living than the CPI [which measures a fixed basket of goods & services.] This chart covers monthly data and the fed funds target rate reflects the monthly average. As such, it will not correspond to the most recent fed funds rate target
Data Source: Haver Analytics
 

2017 Release Schedule
Released On: 2/13/155/36/147/269/2011/112/13
 


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