Good Morning Folks
As most know, the Federal Open Market Committee has been in session March 17 and March 18, and is expected to release their updated monetary policy statement at 2PM Eastern Time on Wednesday March 18.
Most in the financial press are stating that the language of “patient” will be removed from their statement, but it is my OPINION that while the word may be deleted, the message will not be.
As discussed on this site in prior posts, the PCE Inflation data is not where it needs to be (near 2% per FOMC on-the-record-remarks or in my opinion “showing clear and defined progress towards 2%”). This, of course, assumes that the FOMC considers what it has previously released, statement-wise, to the public, as being important. See prior post regarding this observation.
In a very quick overview of market action since last week, the markets have stabilized and tracked upward, however we cannot call this a “new uptrend” as the market action is akin to someone sticking their hand into an icy pond to check the water temperature. I believe some participants are cautiously re-entering stocks, and we see a very slight movement upward. The 2040 level on the SP 500 is the most recent support level. See chart:
I am sticking my neck out here but my OPINION is we see no rate hike mentioned and thus the previously believed June rate hike will be determined to be unlikely. I believe we will see increased discussion on inflation data, the rising dollar, and energy prices. I believe we see some sort of language such as “continue to proceed cautiously” or “while we are encouraged by improving jobs data, the inflation data remains an area of concern” etc.
Again, all my opinion. I have been wrong before…the FOMC may surprise me. (Doubt it).
I remain 100% S-Fund.
– Bill Pritchard
