April FOMC outlook from UBS: This meeting is....>

FED: April FOMC outlook from UBS: This meeting is a transition from the

emergency stance to a medium-term macro outlook.

 Statement: Will have to mark-to-market economic data, with economy

"substantially" hurt by COVID-19, and decline in breakeven inflation.

- Likely cite near-term s"contraction", but still point to the economy getting

back on track to expansion, and emphasize disinflationary pressures (vs prior

commentary on "muted inflation"). To largely keep intact wording on rates at

zero "until confident economy has weathered recent events"

- Press conference: Powell likely to tout how much the Fed has done so far and

contrast recent actions with 2008-09 when the Fed was sometimes seen as favoring

Wall St. over Main St. Likely to avoid forecasting how bad the economy will be.

- Future action: Transitioning to open-ended, flow-based QE that will be

announced at June FOMC, with $50bln Tsys/30bln MBS per month, with shift to 5-yr

Tsy and longer. Also in June, explicit forward guidance for rates to remain at

zero until at least mid-2022, reinforced by front-end YCC control. FOMC could

make those changes now, but prob too occupied now w emergency actions.