Barclays Research discusses its expectations for tomorrow's FOMC policy meeting.
"We no longer expect a change in policy rate guidance in September. FOMC participants appear to want more clarity on the outlook before altering forward guidance on how long the target range for the federal funds rate may be at the zero-lower bound. Instead, we look for the Fed to adjust its communication on asset purchases, saying purchases will be conducted to support economic recovery by putting downward pressure on long-term interest rates as opposed to supporting market functioning," Barclays notes.
"As part of this change, we think the Fed may choose to increase the average duration of its purchases modestly. In the press conference, we expect Chair Powell to emphasize that downside risks to the outlook from COVID-19 and fiscal policy uncertainty remain," Barclays adds.