Jefferies economist Ward...........>

US TSYS/RESEARCH: Jefferies economist Ward McCarthy said it's "time to begin

balance sheet normalization." He adds with "positive" CPI tone and "potential

debt limit crisis off the table until 2018, the decks have been cleared for the

FOMC to announce the beginning of balance sheet normalization at the upcoming

FOMC meeting; we expect the Fed to implement the reinvestment Caps to reduce

SOMA holdings in Oct. He expects Wed policy statement and SEP to include: 

1/ "Announcement that "Fed will commence with balance sheet normalization

beginning in mid-Oct." 

- 2/ "No change in rate policy implementation or guidance." 

- 3/ "Limited changes to the description of current economic conditions, and a

repeat of the assessment that near-term risks to the economic outlook appear to

be "roughly balanced." 

- 4/ "Limited changes" to "description of inflation conditions and expectations,

and a repeat of the observation that" FOMC "is monitoring inflation developments

closely." (More)