On the face of it, Wednesday's FOMC meeting is a non-event.
The consensus is that the taper will continue as scheduled, ending in March. The Fed will also tip a rate hike for the March meeting. We'll get the usual talk about inflation risks but with caveats that it should decline later in the year.
Yet when you survey the scene in markets, it's clear there's much more going on. The volatility in the S&P 500 is breathtaking with the S&P 500 falling 50 points in the past few minutes after climbing all the way back from a 126 point deficit.
That backdrop has markets on edge and it's what will make Wednesday so difficult for Powell. One wrong turn of the tongue and it's curtains for this market. The slightest hint of a cavalier attitude towards hiking will cut the legs out of the market. Even a misinterpreted line could do that.
We've seen that play out before many times with many Fed chairmen, including Powell. I'm betting he wishes he could call off the press conference.
More than ever, tomorrow's live stream will be a valuable one and we'll be here to analyze in real time.
