Fed is universally expected to leave rates unchanged today - TDS

The Fed is universally expected to leave rates unchanged at the July FOMC in what could serve as a placeholder meeting as policy makers await confirmation that disinflationary headwinds are transitory, according to analysts at TDS.

Key Quotes

“Our base case calls for minor mark-to-market changes in the statement while a more cautious message on inflation would warrant a more dovish reaction. One other risk is that the Fed uses the July FOMC to explicitly set up balance sheet reduction starting in September, which would be viewed as hawkish. New home sales for June are the only economic release scheduled and markets expect a 0.8% m/m increase to a 615k pace, which would represent the strongest month since March.”