Daily Economic Outlook, 29th July, 2015

The outlook of today's FOMC policy meeting will be watched closely by markets. No immediate policy move is expected. However, with recent comments from Fed Chair Yellen seemingly increasing the odds of a September hike, investors will be looking for a clearer signal on the timing. There is no press conference, nor will the Committee update its forecasts, and so the only immediate clues will be in the post-meeting press statement.

This statement will likely be more upbeat on recent economic performance. It may also note less concern about the downside risks to inflation, although the recent fall in the oil price argues against this. A bigger question is whether the Fed wants to send a clearer signal that it intends to hike at its next meeting in September. At the start of the previous interest rate tightening cycle in 2004, the statement was changed to read "the Committee believes that policy accommodation can be removed at a pace that is likely to be measured". A similar change in language this time would strongly suggest that the FOMC intends to hike at the next meeting, unless the economic data take a decisive turn for the worse, states Lloyds Bank.

The pick of the data earlier in the day is likely to be UK mortgage approvals and US pending homes sales. These will provide updates on the strength of the housing upturn in their respective markets, adds Lloyds Bank.