While most economists don’t expect the Fed to announce a date to start shrinking its balance sheet Wednesday afternoon, there are some arguments in favor of doing so.
Most expect the announcement to come in September, but that could coincide with a possible government debt-ceiling showdown, which might come to a head in October, as Bloomberg reports. It would also begin the process ahead of possible change in Fed leadership. While Janet Yellen is still in the running to be re-nominated, Gary Cohn is also reportedly a front-runner.
Weak inflation, however, will likely keep the Fed from moving aggressively. “Nothing is required here, so there is no need to rock the boat,” economists at UBS were quoted as saying in a research note.
The Fed is scheduled to release their post-meeting statement at 2:00 today.