NatWest: Powell's Main Message Will Be "No Rush"

NatWest expects a wide-ranging taper discussion by FOMC participants at the July meeting (with staff presenting potential options), but the most noteworthy news is likely from the press conference and in the minutes released in August.

• Only modest changes to the statement - Powell's line from his recent testimony "Inflation has increased notably and will likely remain elevated in coming months before moderating" could replace "Inflation has risen, largely reflecting transitory factors."
  
• Possibly could insert a reference to reflect the Delta Covid variant.
• Powell's main message in the presser will be no rush to taper as "substantial further progress is still a ways off", but he will clearly remind that the taper countdown has officially begun.
• Powell to sound optimistic on labor market improvement, but remind that there is "still a long way to go", and will put slightly less emphasis on the inflation pickup being transitory.