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The Barclays Research Team offers a sneak peek at what to expect from Wednesday’s US Federal Reserve (Fed) monetary policy announcement.

Key quotes

“We expect little new information from the July FOMC meeting. Previous Fed communication has already delivered the message that monetary policy will likely be accommodative for quite some time, if not years.

Although the Fed is likely to upgrade its assessment of the incoming data in May and June, the rising number of COVID-19 cases is likely to keep the committee focused on downside risk, the potential scarring of labor markets, and elevated uncertainty.

Hence, we expect no real change in policy guidance and the Fed will likely affirm in the statement and press conference that its current stance remains appropriate” 

We think the Fed is likely to take additional steps toward the completion of the framework review. We continue to expect the Fed will shift in the direction of inflation averaging that opens to the door to make-up strategies.”