Federal Reserve Decision Preview: Changes Expected in the Fed's Policy Statement

The Federal Reserve may revise its policy statement in the following ways. In the first two paragraphs, the Fed may change its wording to acknowledge the recovery in economic activity, possibly removing the phrase "rising inflation," while maintaining other statements regarding inflation and employment. It may also mention the uncertainty caused by the lack of data due to the government shutdown. In the third paragraph, the Fed will revise its target range to reflect the interest rate cut decision. The wording regarding QT will likely change the most, as the Fed is expected to signal the end of quantitative tightening at this or the next meeting. In the final paragraph, we may see Fed Governor Milan oppose a 25-basis-point rate cut and vote for a 50-basis-point cut. We may also see Kansas City Fed President Schmid oppose the rate cut and support keeping rates unchanged, as he is one of the most hawkish voting members. These potential changes are largely already anticipated by the market and would not be surprising. (Jinshi)