No Surprises Expected as Markets and Federal Reserve Say Goodbye to Janet Yellen

The Federal Reserve meets on Wednesday for the last time with Janet Yellen as chair before Jerome Powell takes charge, Markets have priced in negligible odds of rate hike next week. The Fed appears irrelevant in the current stock mania.

The Federal Reserve meets on Wednesday for the last time with Janet Yellen as chair before Jerome Powell takes charge, Markets have priced in negligible odds of rate hike next week. The Fed appears irrelevant in the current stock mania.

Yellen Goodbye

 

FOMC 2-Day Meeting – Statement

Wednesday 31st January 2018 at 2.00 pm ET (1900 GMT)

There Will be NO Press Conference to follow

Wall Street from pricing in just one 2018 rate hike is now pricing in three with the passage of tax cuts. With no press conference or update of economic projections this time Yellen’s last words will be in the statement.

Other than buying or selling on the expected news market reaction would appear tempered unless the FOMC shifts its assessment of “roughly balanced” near-term risks to risk of overheating.

With there no press conference after the 31 January meeting, there will not be an updated Summary of Economic Projections (SEP).

The federal funds futures market has priced in an almost 90% chance of a 25bp rate hike at the 21 March meeting. The January policy statement will most likely do nothing to diminish the expectation of the Fed raising 25bp in it’s policy normalization in March.

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