Now that the data is out of the way, it looks like a waiting game for the Fed statement at mid-afternoon. Minor upside tweaks to the economic assessment are expected but the “extended-period” verbiage is expected to be retained. Economists say Bernanke would be loath to throw the market a policy curve ball ahead of his confirmation vote tomorrow.
Deutsche Bank’s US economist was on the tape a short while ago daying he sees the first 25 bp hike from the Fed coming in Q3 of 2010, later than the market now expects. Most see a move late in Q2, at the moment.
Markets will be thin and could be whippy if large orders need to be executed. This time of year is a trader’s delight as customer orders can have big impacts. Unfortunately, bonus numbers are already baked in the cake.
