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.”
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