The Week Ahead: FOMC, The FED breaks its Silence..

By John Thorpe, Senior broker

There is little doubt traders will be tightly focused on the FOMC meeting on Tuesday and Wednesday. The release of the meeting statement at 14:00 ET on Wednesday will settle speculation about whether Fed voters will pause interest rate hikes or take rates higher for the eighth meeting in a row. If the Committee raises rates, by how much? Will it be a 25 or 50 basis points?

Powell’s press briefing at 14:30 ET on Wednesday will be the first opportunity for the press to ask of the Fed Chair about recent turmoil in the banking sector. Most of the news became public just as Fed officials entered the communications blackout period for the next rate announcement (midnight, Saturday March 12 through midnight, Thursday, March 23). Unless there was an urgent need to alter the signals previously given about the direction of monetary policy, it is not a topic that Powell would speak about publicly until after the meeting. Powell is likely to get as many questions about the state of the banking industry in the US as he will about the FOMC decision and forecast. My Favorite tool is the CME FedWatch tool.

The bar graphs represent the fed fund futures prices and adjust daily. As of this writing, according to the tool, there is a 28% chance of no change and a 71% chance of .25 increase, although some economists do expect a .50% increase, the market is discounting that faction and focusing on Zero change or a .25 bump. CME FedWatch Tool – CME Group

Beyond the FOMC data this week, we have some housing data that my cause our markets to flinch, Existing home sales tomorrow @ 9:00am CDT. Expectations are for a gentle rise from January’s numbers to 4.17 million units. With initial claims for unemployment on Thursday @7:30 CDT before New Home sales @ 9am CDT.  Have a safe trading week, Plan your trade and trade your plan.

A Cannon broker will be able to assist, provide feedback and answer any questions.