Market Expectations for Fed Meeting

The Federal Reserve's two-day meeting begins today, ending with a statement and press briefing by chairman Jerome Powell on Wednesday, January 30.

Market watchers are expecting 3 key points from the meeting: balance sheet comments, "patient" language, and data dependence, CNBC reports. Rates are expected to be unchanged during the meeting, and experts anticipate Powell to "go out of his way to not rock financial markets." Fed watchers say that Powell's rate hikes have added volatility to the market and to the economy, and now suspect Powell will tread lightly to keep the market waters calm, and stay on message that the Fed does not intend to rush another rate increase.

"I'm betting this is a press conference he'd rather not have. It's all risk, no return," said Ethan Harris, head of global economics at Bank of America Merrill Lynch. "They've calmed the markets." Harris said Powell and other Fed officials have successfully pushed back against criticism that they were ignoring the warning from the markets about economic weakness. "They made it clear they do pay attention to the markets and business leaders, and they're not just fixated on hard data," said Harris.