###POV: POWELL PUT NOT GUARANTEED: With.........>

FED: ###POV: POWELL PUT NOT GUARANTEED: With expectations for a dovish hike at

this week`s Fed meeting looking fully priced, Wednesday could disappoint.

- The FOMC arguably has cover to deliver a dovish outcome, with oil prices

falling and housing weakness - plus rate market pricing (<1 hike in 2019).

- But unless the FOMC`s macro projections are downgraded significantly, unlikely

given mostly solid data since Sep, a big shift lower in the dot plot is hard to

justify - and could look like capitulation to equities/political pressure.

- FOMC likely to attempt shift to data-dependent flexibility via

statement/Powell presser, but could fall short of ultra-dovish outcome.

- Base case: Hikes 25bps funds/20bps IOER. Median dots for 2019 lowered from 3

to 2, 2020 maintained at 1. 2019 GDP/PCE revised moderately lower. Statement

amends `further gradual increases` etc to reflect greater data dependency.

- Dovish: 2 hikes removed from 2019-20. Risks seen to downside (global/financial

developments?). GDP/PCE forecasts down. Possible dissent (Bostic?)

- Hawkish: Minimal changes to language/macro proj, same dot medians (2020 still

skewed to upside). Biggest market reaction: stocks down, short-end Tsy selloff.