Could The Fed End Asset Purchases Today?

Speculation continues to swirl about a potential Fed inter-meeting rate hike. Another unlikely - yet somewhat more likely - move would be to reverse the January FOMC decision to continue asset purchases in Feb-Mar, and declare them over effective immediately.

• They'd probably have to decide before the final monthly NY Fed operational purchase schedule is released today at 1500ET, though they could possibly also do so over the weekend, before the actual purchases start.
• It's probably unlikely that Powell could reach consensus now that hiking rates before the next scheduled meeting, or even raising 50bp vs the usual 25bp, is appropriate policy. Post-CPI comments overnight from SF's Daly (to MNI) and Richmond's Barkin pushed back on 50bp prospects, for instance.
• But there's little to suggest the FOMC couldn't reach consensus on ending purchases immediately, especially given Powell's pledge to be "nimble" and "humble" and above all, data-dependent.
• Adding more accommodation via QE in the face of continued above-expected inflation and jobs numbers would probably be considered inappropriate by most/all participants given the current policy configuration.
• Another $30B wouldn't make much of a difference to the SOMA portfolio. Stopping would mostly be a symbolic policy shift, but for one thing it would provide a more appropriate length of time between the end of buys and the start of tightening.
• The question is how much communication would alongside it to quell speculation of potential inter-meeting decisions in future, and what it would mean for the March meeting.