Statement: Focus Is On "Ongoing" Guidance

The main area that will be eyed in the February FOMC statement is the rate guidance. Analyst opinion is pretty evenly split on whether the guidance will be amended from "The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time."

• MNI's expectation is that there will be only limited changes vs December, but our Instant Answers attempt to capture some of the more likely possibilities.
• A change to indicate "some further / additional" increases could be taken as a modestly dovish sign that the FOMC is signalling a pause is coming at an upcoming meeting, with the plural implying after two more hikes.
• More dovish would be signalling a single further hike (eg "an additional" increase). Even more dovish (and much less likely) is if they signal they intend to hold rates after this hike.
• In the event of such a change, they may offset it by adding language that has been in the FOMC lexicon for several months: that the Committee anticipates holding rates in restrictive territory for "some time", signalling that they have no intention at this time to cut rates in the near future.
• The following sentence that begins "In determining the pace of future increases in the target range" will be made basically redundant by the stepdown from 50bp to 25bp; this is likely to be changed to reflect how the FOMC will determine whether it has reached "sufficiently restrictive" territory, though this will probably have minimal market impact.