The no-drama July FOMC meeting was a testament to the Fed’s meticulous, inchwise approach to disentangling itself from its crisis-era policies. As expected, the FOMC statement cranked up expectations for a September announcement another notch, while realigning other language to account for the latest data releases. It was all very much in line with the expectations laid out in our July FOMC preview.
Of course the Committee will be closely attuned to the next round of labor and inflation data, but they’ve set the bar pretty high for a change in course. According to their own language, the economy only needs to evolve “broadly as anticipated.” We do have the late-August Jackson Hole conference, but Chair Yellen has tried to downplay that conference’s traditional role as a platform for policy communication. The minutes of the July meeting will come out a week earlier, and those will likely give expectations for September another nudge, stealing the thunder of any Fedspeak that might come out the following week. The Fed has already said it wants the process of balance sheet shrinkage to be as boring as watching the paint dry, and they seem to be getting their way. There’s no reason to think they will make any sudden moves now.
As iCIMS’ former chief economist, Josh Wright led a team of data scientists in analyzing emerging trends in the U.S. labor market. With publications ranging from academic journals to national media, Wright previously served as a U.S. economist with Bloomberg L.P., and was a staff researcher at the Federal Reserve.