April FOMC outlook from Wells Fargo: More.......>

FED: April FOMC outlook from Wells Fargo: More likely to provide additional

details on previously-announced facilities than it is to increase the scope or

scale, or to introduce completely new facilities. Doubt for example will change

terms on the Main Street program at this meeting.

- Highly unlikely to venture into negative rates/YCC at April FOMC.

- Key questions: When will PMCCF/SMCCF become active? Will purchases be

concentrated in most stressed sectors first? Or sector allocation plan instead?

Is $750bln the max size of the combined facilities, or does the Fed stand ready

to increase their size (as well as other emergency facilities)?

- IOER: Hiked by 5bps, but ON RRP maintained at 0.00%.

- Future action: Short of another market malfunction/significant rise in yields,

Fed to continue tapering purchases through spring and summer, eventually halting

by end-summer. Will resume buying bills ($200-300bln over rest of Q2) given high

issuance. Will continue buying MBS, but at reduced pace.

- Could make direct buys of non-agency MBS (or permit as collateral in TALF).