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This week is a critical week for Fed watchers. Ben Bernanke and members of the Federal Reserve will start a two-day FOMC meeting. The announcement of the language and Fed guidance will come at approximately 2:15 PM EST on Wednesday. Obviously there are no changes expected on the interest rate policy and Wall Street traders will be looking for the guidance around how the asset purchases are going under QE3.

The only real government data on Tuesday is the Richmond Federal Reserve’s Manufacturing Index. Keep in mind that Richmond Fed President Jeffrey Lacker has dissented with the votes. Bloomberg has a consensus expectation of 6 on this index, with anything above zero representing growth and any reading under zero representing contraction.

On Wednesday morning comes the PMI Manufacturing Index Flash reading around 9:00 AM EST and the consensus reading from Bloomberg is 51.5. The range is fairly tight at 50.6 to 52.0, but we would caution that this reading is covered by fewer economists than we see elsewhere.

What is interesting is that much of the key economic data will come out later in the week after the FOMC announcement on Wednesday. Here is the economic calendar for Thursday:

• 8:30 AM EST Thursday Weekly Jobless Claims, Bloomberg sees 372,000
• 8:30 AM EST Thursday Durable Goods, Bloomberg sees 7% headline and only 1% on ex-transportation basis
• 8:30 AM EST Thursday Chicago Fed National Activity Index
• 10:00 AM EST Thursday Pending Home Sales Index
• 11:00 AM EST Thursday Kansas City Fed Manufacturing Index
• 4:30 PM EST Thursday Fed Balance Sheet and Money Supply

On Friday we will have two key reports. The first report is the first look at Q3 Gross Domestic Product at 8:30 AM EST. We may see some revisions on prior quarters as you often see, but Bloomberg is calling for GDP growth of only 1.9% on the headline GDP and 2.0% if you include the price index. The market will also get to digest another consumer sentiment report for the month of October.

Keep in mind that Monday’s presidential debate is the last of the three debates and this week’s FOMC meeting is the last FOMC meeting ahead of the election.

JON C. OGG