Goldman Sachs' assessment of the June FOMC -....>

FED: Goldman Sachs' assessment of the June FOMC - sees action in September:

- Powell struck a tone that was consistently dovish, though not surprisingly so.

The meeting offered little in the way of genuine news, though it may have given

investors greater certainty that policy will remain on hold for a long time.

- In SEP, -6.5% Q4/Q4 growth in 2020 is well below our -3.8% forecast; other

surprise was L-R funds dot remaining 2.5% vs our expectation of 25bps decline.

- A final verdict on asset purchases, fwd guidance, and YCC now appears most

likely to come in September.

- We continue to expect outcome-based fwd guidance that delays liftoff roughly

until the economy reaches full employment and 2% Y/Y inflation, though exact

criteria are quite uncertain.

- We also expect the FOMC to introduce front-end YCC that caps Treasury yields

out to a horizon somewhat short of the date when the liftoff criteria are likely

to be met. Though not a foregone conclusion (Powell: "open question"). Targeting

rates further out the curve, say at the 10y point, is very unlikely.