The following is Goldman Sachs's expectations and strategy for this week FOMC meeting on Wednesday: Bond purchases: Our US Economics team expects the Fed to trim its monthly purchases of US Treasury bonds by US$10bn to US$35bn, and leave MBS purchases unchanged at US$40bn per month. The market consensus appears to be for a slightly larger tapering (US$10-15bn on Treasuries and US$5bn on MBS). The other key variable is when the purchases will end. The prevailing consensus is around the middle part of next year, when unemployment is expected to break through 7% (from 7.3% currently). Forward guidance: Our team’s ... (full story)