Market pricing and policy risk: Markets largely price a 25bp Fed hike in
September, with a failure to raise seen as a significant dovish surprise. Vote
dynamics: watch for dissent risk — the meeting could see votes for holding or
for a larger 50bp increase rather than a unanimous decision. Inflation
narrative: how the FOMC frames energy’s contribution to inflation — as a
temporary shock or more persistent — will shape whether any hike is viewed as
one-off. Dot plot and rate path: if the Fed hikes 25bp, focus on whether the dot
plot implies additional hikes this year and whether hikes resume in 2027; the
June SEP showed one hike in 2026 and a cut in 2027. Projections and guidance:
monitor whether the Fed again omits or alters forward-rate projections and
whether the Summary of Economic Projections revises inflation, growth or
unemployment forecasts to justify policy moves. Press‑conference topics likely
to move markets: the rationale for any hike and whether more are planned;
assessment of long-end yields and Treasury buyback/issuance operations; views on
potential U.S.-Japan joint intervention in the yen; any private communications
with the White House and potential public political reaction; the Fed’s view on
AI-related risks; and progress on five Fed working groups.
