Today’s FOMC Meeting should offer very little new insight. We have recently had the testimony from Bernanke to the Senate and House, and last week’s employment and payrolls data were just not enough of a change in either direction nor were the off-target enough to make for any new great revelations. We also expect to hear almost nothing about the new round of bank stress tests as a result.
Credit Suisse thinks that today should be more routine than their last meeting. After all, no one is expecting any rate change data.
One aspect which may get discussed is the update to operation twist where the Treasury purchases debt securities, but even then it would seemingly only be an adjustment rather than a new entire direction.
Rising energy prices, improved retail sales, and improved employment could all assist in changes on the policy statement for outlooks. It is believed that the next help will be in a sterilized purchasing of debt securities, although even then the Treasury probably does not want to grow its balance sheet by too much more.
Our expectations are low for today’s FOMC meeting.
JON C. OGG
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