F_O_M_C Countdown

I'm sure you are tired of hearing it as I always put this out on any F_E_D or F_O_M_C event, but as ALWAYS, beware the knee jerk move, they tend to be strong and wrong, usually within a day or a few days, the Ukraine situation as well as max pain options expiration pin tomorrow are a bit of a wild card, but it depends on how strong Yell comes on.

In other words, be patient, don't overreact to price movement.

Here's what I expect we'll likely see....

FOMC policy meeting is expected to leave policy rates unchanged. The big issues will be changes in the characterization of the economy, changes in guidance, and if there are any hints at slowing taper. Also, the Fed will release its quarterly forecasts at the same time as the statement.

The 6.5% unemployment threshold that still stands as official guidance is scaring the bond market as we hit 6.6% just a couple of months ago and rate hikes are market killers, this is why the bond market freaked out and the 10 year yield hit 3+% when they had that June 2013 meeting in which they were very hawkish in talking about ending QE3 by the end of the year, the bond market doesn't care about that, it was the guidance that 6 months after QE3 ends, there's likely to be a rate hike, after the F_E_D saw that you might remember we were asking, "Why is the F_E_D so scared ?" re: QE3 as they backed off, IT WAS THE BOND MARKET'S REACTION.

There's also the issue of foreign Treasury holdings in the F_E_D's custodial account seeing their largest ever selling spree last week, Russia and China seem to be teaming up (although Russian holdings are only about 200 bn). We'll have to see if there's talk of slowing the taper, that would almost certainly be in response to the recent foreign selling.

AS ALWAYS, I'LL BE OUT OF RADIO CONTACT DURING THE ANNOUNCEMENT AND LIKELY JUST AFTER, THIS IS WHERE YOU CAN LEARN THE MOST ABOUT THE MARKET BY PAYING ATTENTION TO REACTIONS TO DETAILS SO I'LL BE BACK, BUT DURING THE POLICY STATEMENT, I'LL BE OUT AS USUAL.