What can we expect from FOMC today? (21:00)

Today, we expect the Federal Reserve to publish its minutes from their January 29 and 30 meeting. Investors will expect the report to provide further details on the discussions that took place at Committee meetings prior to taking the decision to withhold lifting of interest rates.

At a press conference last month, Jerome Powell argues the pause decision that there are risks to the US economy that may slow down. Risks stemming from the cooling of growth in Europe and Asia and significant market volatility in December. Jerome also told investors that the Fed may be flexible, especially with regard to the Fed's $ 4 trillion balance.

Markets started a good rally in the past month as a reaction to the Central Bank's more favorable position, especially since Powell confirmed that the "pause" on raising interest rates would be unlimited. He also added that it was too early to say what the next move would be. Investors will look for new insights into the Fed's view of markets and the economy before continuing to raise interest rates. Meanwhile, any sign that bank officials have discussed interest rate cuts will attract investor attention because it has not been publicly discussed before.

The statements about balanced risks will also be closely monitored because we will find out if they are turning to strength or weakness. The disappearance of this will highlight the Fed's suspicion of the economic impact on financial markets, the weak growth in the world, and the uncertainty surrounding trade negotiations and other political events. Minutes will show which of these risks may prove to be the greatest threat to the economy. Risk discussions will tell us how long the FED would be in a pause.

FOMC today has to tell us how long the balance will continue to diminish. We could also find out if they will slow down with balance-sheet operations or be able to get rid of bonds sooner.

Especially for inflation, the minutes today can tell us about the central bank strategy that revolves around the defined inflation target of 2%. Last time, inflation does not justify analyzes that inflation would rise even more than 2 percent, making it more difficult for the Fed to demonstrate that the target is seen as a symmetrical variable rather than a ceiling.

Source: Wall Street Journal

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