FXStreet (Delhi) – Research Team at Goldman Sachs, expects the FOMC to raise its target range for the federal funds rate to 0.25-0.50%, bringing an end to the seven-year period of near-zero interest rates. Key Quotes “With this action essentially priced in, focus will be on the committee’s policy guidance for 2016 and beyond. • If the FOMC raises rates this week the post-meeting statement will require a thorough rewrite. We expect three main changes. First, we expect the committee to upgrade its description of the labor market in light of firmer payroll growth. Second, we expect the statement to remove some of its relatively cautious language on inflation, while continuing to emphasize that inflation will remain a key determinant of the policy outlook. Third, we look for the statement to show a clear baseline for additional rate hikes—it will not signal “one and done”. • Although Fed officials regularly describe the likely pace of rate hikes as “gradual” we do not expect this term to appear in the statement itself. Recent comments suggest some hesitation about adopting “gradual” as official guidance, despite the frequent mentions. That being said, from the press conference guidance and the Summary of Economic Projections (SEP), the gradual message should be all but explicit. • With incoming data broadly cooperating with Fed officials’ outlook we are looking for only modest revisions to the economic projections in the December SEP, although median core inflation forecasts could decline slightly. The “dot plot” could prove more interesting. For 2016, we expect a number of officials’ funds rate projections to move lower, but for the median to remain at 1.25-1.50%—although the latter is a close call. Beyond 2016 we think the odds favor a reduction in the median longer-run funds rate projection from 3.50% to 3.25%; we also see 0.25pp reductions for both the 2017 and 2018 medians. • Chair Yellen’s press conference should offer a cautious message. We expect her to underscore that policy is not on a preset course, and that the subsequent pace of rate hikes will be highly sensitive to incoming information—including economic data as well as financial conditions.” For more information, read our latest forex news.