Announcement from the Federal Open Market Committee isa due t 1800GMT on Wednesday 20 March 2019

Previews posted already:

Adding this, via RBC (bolding mine):

  • There is widespread consensus that the Fed will leave rates on hold in March (anything but a stand-pat would be surprising) and thus the aftermath of the FOMC meeting will be more about detail around any shift in the economic forecast and balance sheet run-off.
  • Given Fed rhetoric since the December market selloff, it is very likely that the 2019 FF dot shifts down to show a median of one rate hike this year-we think 2020 shows one additional hike, with a cyclical endpoint for FF at 2.875% through 2021.
  • With fairly symmetric uncertainty around the outlook, we think the committee wants the flexibility to go either two times or none at all this year. Showing a median of zero hikes would be inconsistent with this and might suggest to the market that the Fed knows something it doesn't about the prospects for economic growth.
  • On the balance sheet, it is unclear whether this meeting is still too soon for any substantive information on the timing of runoff. We think that an announcement will come by mid-year and that run-off is poised to end by late 3Q19/early 4Q19. At that point, the Fed would continue to allow MBS to run off and have to purchase Treasuries to offset that and currency growth on the liability side (if it intends to keep reserves at a relatively stable level). Moreover, we think the Fed is likely to concentrate future purchases of Treasuries at the very short-end of the curve.
  • Perhaps Powell will give some detail on this at his post-meeting press conference

No pressure, Jerome …

Announcement from the Federal Open Market Committee isa due t 1800GMT on Wednesday 20 March 2019