Preview Today’s FOMC Meeting announcement due @ 215pm EST

FOMC rate decision due out at 14:15ET- Today’s FOMC gathering is a one day meeting, and unlike the last two FOMC meetings, Chairman Bernanke will not be holding a press conference after today’s decision.

– Given the market turmoil triggered by the European debt crisis and the S&P downgrade of the US credit rating, expectations have fluctuated over the last week, but the better than expected jobs data last Friday is thought to have bought the Fed some time before it has to contemplate new policy action. The most likely outcome for today’s meeting is a firm reaffirmation that the Fed stands ready to act if necessary.

– There are also some less likely actions that the Fed has said are at its disposal but not expected to take today. The FOMC could give more explicit policy guidance, reduce the Interest On Excess Reserves (IOER), or announce an extension of the average maturity of Fed balance sheet holdings. The FOMC could also decide to tinker with the “extended period” language to indicate a longer policy hold than just two or three meetings.

– The June meeting statement acknowledged the slowdown in growth and that the labor market recovery was weaker than expected, noting that it was in part due to supply chain issues (ie Japan). As with all of the meetings this year, there were no dissenting votes on the FOMC in June, the vote was 10-0.

– The June statement reiterated that the Fed still “expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline.” The committee may need to tweak this in the August statement if recent data have eroded their baseline forecast. The June statement also reemphasized the Fed’s dual mandate of price control and maximum employment by noting it will “monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability,” leaving the door open to essentially all policy options.