Analysts at Barclays offers insights on what to expect from Wednesday’s FOMC monetary policy decision, highlighting that the main point of interest at the July meeting will be the announcement of the start time of balance sheet normalization.

Key Quotes:

“Altogether, we believe the committee will stay on hold in July. The statement should sound more upbeat on activity and labor markets, particularly following the June employment report, while containing cautionary tones on inflation.”

“We believe the statement could point to an announcement on balance sheet policies in September by saying the committee currently expects to begin implementing a balance sheet normalization program at "an upcoming meeting" or "very soon" as opposed to "this year" as was the case in June.”

“We continue to expect the third rate hike this year in December. “