The Fed meeting later today has had the market feeling (and positioned for) “HAWKISHNESS,” especially after the ECI pile-on yesterday, which didn’t simply “upside surprise,” but re-accelerated to 1.2% after ending 2023 at 0.9%, and showing that persistent wage pressures further add to the risk of keeping inflation “too elevated” for the Fed.
However, according to Nomura MD Charlie McElligott, the largest risk with the Fed today is that there will be no summary of economic projections / no dot plots...
...meaning that outside of the usual statement, it will be Powell’s press conference alone that dictates market behavior... and the backtest on that is a bit dicey, with some historic faux pas in-sample.
