Goldman Preview: Dual Forward Guidance, But Later

Goldman Sachs FOMC Preview: No action in July - framework
review to be completed in Sep; fwd guidance/asset purchase policies in Nov.

- Re that timing: would be unconventional to use Jackson Hole to present
the framework review, and presenting both framework review and policy changes
at a single FOMC meeting would be too overwhelming. Would also help avoiding
making a monetary policy change before November elections.

- Framework review to adopt 'fuzzy version' of AIT (2-2.5% inflation goal
when economy is at full employment), short of price-level targeting. Also,
'soft nod' toward front-end YCC as addition to toolkit, but unlikely used soon.

- Fwd guidance to be outcome-based, delaying liftoff until both full
employ. and 2% infl. This won't be met until roughly 2025.

- On Balance Sheet, to transition to more traditional asset purchase
program, incl noting pace of purchases in the statement, guiding toward an
expectation that tapering would begin about a year before liftoff, and
describing its purpose as increasing accommodation to support the recovery.