FOMC preview: Powell to highlight three themes about why they cut rates - UBS

Analysts at UBS offer a sneak peek at what to expect from Wednesday Federal Open Market Committee’s (FOMC) decision on the US monetary policy due to be announced at 1800 GMT.

Key Quotes:

"Expect 25 bps rate cut.

Expect the same two dissents: George and Rosengren.

Lower dot-plot path, a two-cut median in 2019, but no change to longer run.

The statement will be slightly downgraded. 

To acknowledge the contraction in business investment spending.

We suspect they will also qualify the sentence that says "the labor market remains strong" we think the statement will say that "uncertainties about the outlook have increased" because of the escalation of the trade war and the global economic outlook.

We expect Powell to highlight the three themes listed in the July minutes about why they cut rates: uncertainty from the trade war, the global outlook, and low inflation. The last seems to be fading in intensity, but the first two are more pressing.”