Looking at today's scheduled release of Minutes from the September FOMC meeting (which at least according to one trader will be the "start of the market changeover process"), RanSquawk reminds us that the Federal Open Market Committee stood pat at the meeting, as expected. The Committee also announced that it would begin to shrink the size of its balance sheet in October, as expected, with the process falling in line with a previously disclosed detailed plan. Additionally, the summary of economic projections saw the FOMC trim its "longer run" Federal Funds target rate expectations, while the nearer-term core PCE projections were also trimmed, and GDP estimates were raised.

With that in mind, here is what Wall Street expects from the minutes to be released at 2pm ET today, courtesy of RanSquawk.

RBC suggests that the “debate surrounding the drop back in core inflation this year was particularly lively. The bounce-back in CPI inflation appears to have convinced the centrists that the earlier weakness was partly due to transitory factors, whereas the doves are still worried about potential structural factors or lingering cyclical slack.”  This was reflected by the fact that 12 of 16 officials that submitted projections still anticipated at least one more rate hike this year.

In the press conference that followed the decision Fed Chair Janet Yellen noted that “low inflation this year, despite a substantial improvement in labour market conditions, created uncertainty for monetary policymakers.” Although she did note that low inflation may be “transitory” and as a result it does not negate the need for gradual policy tightening.

Since the decision, Fed rhetoric has increasingly cited structural headwinds for inflation, while some of the more dovish members have continued to highlight the need for a pickup in inflation before they are willing to vote for a hike (including 2017 voter Robert Kaplan, who was previously of a hawkish disposition).

Markets still lag the FOMC in terms of rate hike projections, pricing circa two 25bps hikes through the end of November 2018, will the median FOMC projection looks for four 25bps hikes through the end of 2018.

Focus has switched to the race to be the next FOMC Chair, with four notable frontrunners in contention at present (a primer is available here), with Barclays outlining their perceived monetary policy stances in the image below.

Deutsche Bank provided the handy crib sheet seen below, summarising what a victory for each respective front runner would mean across for Fed policy.

What The Bank Desks Are Saying: –

Barclays: Given the outcome of the September FOMC meeting, in which only four participants indicated no further rate hikes this year was appropriate, we expect the FOMC minutes to show that most participants see recent disinflation as largely driven by transitory factors. We expect the discussion to remain focused on inflation and its shortfall relative to what the Fed’s Phillips curve framework would suggest, but we believe most participants will view the unexplained weakness as dissipating over time, thereby permitting a return of inflation to the target. The minutes may indicate that members preferred to reduce their estimate of the longrun neutral rate of interest as opposed to halting the normalization process. Elsewhere, we expect the minutes to include discussion as to why it was time to begin balance sheet runoff and how members see the balance of risks to the outlook for the US economy.

Deutsche Bank: Inflation will likely be a heavily debated topic, but given the recent Fedspeak, it appears that most voting members are looking through some of the recent weakness and prefer to continue the “gradual” removal of monetary accommodation.

HSBC: The FOMC announced in September that it would initiate its balance sheet normalisation programme in October, as described in the June 2017 addendum to the committee’s “Policy Nomalization Principles and Plans”. The operational parameters of the programme had been communicated to financial markets in advance and did not come as a surprise. We will look through the September minutes to see if there was any further discussion regarding the expected impact of balance sheet disinvestment. Inflation was likely a major topic of discussion at the September FOMC meeting. In the conference following the meeting and in a subsequent speech, Fed Chair Janet Yellen noted that low inflation this year, despite a substantial improvement in labour market conditions, created uncertainty for monetary policymakers. In the end, the Chair concluded that low inflation may be “transitory” and that it had not persisted long enough to negate the need for gradual policy tightening. However, some other FOMC policymakers have indicated a preference for allowing inflation to pick up before raising policy interest rates any further. The FOMC minutes are likely to show a range of views on inflation, financial stability, and the implications for policy.

Morgan Stanley: The FOMC minutes are often revised nearly all the way up until the release and can be edited to stress important points. We look for the Fed to resume its gradual path of rate hikes again in December.