FOMC Minutes coming up at 2 pm ET
The market is going to tread a fine line into the March 15 FOMC decision and today's Minutes will be a great opportunity to recalibrate what's expected. The market is currently pricing in a 36% chance of a hike.
What Harker said yesterday was interesting. He indicated that he's poised to support a hike unless the data is weak. That's an important distinction. The general theme in markets and at the Fed is that the bias is not to hike unless the data is strong.
What Harker did was set a lower bar. Now that's just one participant's opinion but it gets to the heart of the question of whether or not the Fed will hike. He also highlighted inflation and GDP data is key inputs ahead of the decision.
The FOMC Minutes are likely to sharpen that focus.
Two things to ignore
A lot of the talk in the run-up to the meeting is on fiscal policy and the Fed's balance sheet. I don't think we're going to get any clarity so I see that as a distraction. The real battleground is inflation and how much confidence the Fed has that it will rise. Also keep in mind that CPI numbers released since the Feb 1 meeting were high and economic data has been strong, so something that sounds a bit hawkish will be read as very hawkish.
For more, here are some headlines Minutes:
- Previous FOMC Minutes: Saw gradual rate hike pace appropriate for now
- FOMC Minutes Likely To Provide Another Hawkish Signal - BTMU
