Three Things Market Expect of Powell’s Speech on Wednesday

Three things the markets want to hear include: 1. Balance sheet comments 2. “Patient” language 3. Data dependence

The Federal Reserve is expected to leave interest rates unchanged at its meeting this week, and Federal Reserve chairman Jerome Powell is expected to go out of his way to not rock financial markets.

Powell has made some unfortunate missteps that have caused violent market reactions. Some Fed watchers expect he will tiptoe through his press briefing Wednesday afternoon, trying not to say anything that would change the Fed’s message that it is patient and not in a rush to raise rates.

The Fed’s two-day meeting begins Tuesday, and it will end with a 2 p.m. ET statement Wednesday followed by a press briefing by Powell.

“I’m betting this is a press conference he’d rather not have. It’s all risk, no return,” said Ethan Harris, head of global economics at Bank of America Merrill Lynch. “They’ve calmed the markets.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza