Fed preview: Practically no chance of a move - BBH

According to analysts from Brown Brother Harriman, the most likely scenario is that the Federal Reserve will keep rates unchanged on Wednesday with 2-3 dissents.

Key Quotes: 

“There is practically no chance that the Federal Reserve changes policy at this week's FOMC meeting.  A move this close to the election would be unprecedented.  The Fed's forecasts (dot plot) will not be updated, and there is no press conference scheduled.  While these obstacles are not impossible to overcome, they are formidable.  Moreover, the hawks on the Fed recognize this and do not appear to be pushing for a hike now.  But that does not mean that there won't be any dissents.  To the contrary, we expect 2-3 dissents.”

“The FOMC statement is unlikely to change substantively.  There will be some minor tweaks to recognize the recent data and the improved growth.  Last October, the FOMC statement pre-committed itself to a hike in December.  We don't think the Fed has to go to this extreme now.  The market is pricing in a 70%-75% of a hike before the end of the year.  A year ago the odds were around half as much.  The Fed can indicate that the bar to a hike is low, needing only continued improvement in the data and no major negative shocks.”