###POV: FORECASTS CONSISTENT WITH CUTS?: The....>

FED: ###POV: FORECASTS CONSISTENT WITH CUTS?: The SEP econ projections from the

June FOMC meeting are hardly raising a big red flag for growth or inflation.

- Only change to real GDP projection is 2020 (an upgrade, from 1.9% to 2.0% in

the March projections).

- Unemployment rate marked-to-market lower 0.1pp across 2019-21 (though

longer-run lowered 0.1pp as well so not seen as inflationary presumably).

- Interestingly, 2020 GDP range seen as 1.5%-2.3%, from 1.7%-2.2%...so wider

dispersion, perhaps reflecting greater uncertainty in the economic outlook.

- Client notes the statement flags biz investment being soft - perhaps the

forecasts reflect a changing mix of growth, even if top line doesn`t move much.

- Lower end of inflation range forecasts down a touch but that's in the rear

view mirror. Core PCE to 1.8% from 2.0% previously for 2019, 1.9% in 2020 from

2.0%. 2021 remains the same at target 2.0%.

- Expect Powell to be asked about all this in the press conference - setting up

discussion of an 'insurance' cut, as the forecasts themselves don't necessarily

justify dovishness.