Barclays economists eyed the recent FOMC....>

US VIEW: Barclays economists eyed the recent FOMC statement and said they "read

the language on balance sheet policy as pointing to an announcement at the

September meeting. The committee stated that "for the time being," it continues

to reinvest principal payments from its securities holdings, but "expects to

begin implementing its balance sheet normalization program relatively soon"

(versus "this year" previously)."

- They add that "while the use of "soon" might be more appropriate given the

committee's desire to begin shrinking the balance sheet, "relatively soon"

provides flexibility to delay any announcement should the debt ceiling, or other

fiscal policy concerns, rattle markets ahead of the September meeting. We see

this as a low outcome and expect FOMC communications in the intermeeting period

to signal that a change in balance sheet policy is forthcoming."