Trial now

Heading North


Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

US: MNI - With no changes expected to the Funds rate Wednesday, attention is on
the FOMC's tone, and balance sheet runoff policy.
- The most common word used by sell-side analysts to describe the upcoming FOMC
meeting's tone is 'patience', followed closely by 'flexibility' - in line with
Fedspeak from Chair Powell and other committee members since early Jan. 
- Lack of data due to gov't shutdown and market stability over the past month
also bolster case for the Fed to enter wait-and-see mode. 
- As such, the base case: statement amends 'gradual increases' guidance on rate
hikes, replacing with emphasis on flexible/data-dependent approach - with Powell
reiterating this in the presser (thus walking back Dec's hawkish tone). 
- Re balance sheet: no change, but policy addendum could be changed. Powell
likely to hint all options are open, while FOMC considers those options. 
- Hawkish risk: No indication that Fed reconsidering balance sheet policy,
minimal/no change to rate guidance, no nod to weaker economic outlook. 
- Dovish risk: Substantive announcement on ending asset runoff. Balance of
economic outlook risks downgraded; explicit language that rates are on hold.