What’s in a word as the market goes bonkers for Fed language?

When you think about it thoroughly, it seems absolutely bonkers that a couple of words or a change of phrase, in a central bank statement can be enough to bring you bumper riches or consign you to the poor house.

Adam has highlighted the language that will make a difference tonight and the data just now has some players trying to second guess the second guessers.

GMP has said that the CPI data will not affect the Fed statement tonight and it “will not include any change in the committee’s view on inflation”.

ING says that the data is likely to “temper enthusiasm for a bigger adjustment” if Fed language later today. They also add that the inflation data “looks rather odd” against the backdrop of strong retail sales and intentions to raise prices and say that the broad based falls in the numbers could be due to a poor seasonal adjustment.

Either way it is what it is and the prices say that the expectation is still the main driver of direction. Whether the language changes tonight or not the market will still not give up this bone. A dovish Yellen will drive the buck down but I fully expect it to be driven right back up again as it was last time.

As we roll towards the FOMC I’ll have the levels to watch up on site later.