The Federal Open Market Committee meet January 30 and 31 next week
UBS (in brief):
The statement should be uninteresting
- The FOMC will have to update the statement a bit, but not a lot. The language about the hurricane-driven disruptions can likely be removed. The time since the December meeting is quite short, so there is little news for them to add.
Voter turnover For 2018, Loretta Mester, Tom Barkin, Raphael Bostic, and John Williams will become voting members while Charlie Evans, Patrick Harker, Rob Kaplan, and Neel Kashkari rotate off.
- We have said in the past that too much emphasis is placed on who is a voter versus a non-voter.
- The FOMC generally makes decisions by consensus, and even when there have been three dissents at a meeting, the path of policy was largely unchanged.
Probably no dissents this time
- Evans and Kashkari dissented against a rate hike in December. We do not see much chance of a dissent in favor of hiking next week. With a hike just last month and an SEP projection of three hikes this year, no participant will feel such urgency as to dissent. Similarly, the dissents last year favored pausing on rates, not cutting rates. So no dissent to the dovish side seems plausible, either.
January meetings are busy
- January meetings are the annual administrative meeting for the FOMC with a great deal of formality, ratifying directives and acknowledging specific roles. ... None of these designations will matter for policy.
