FOMC Preview
March 15, 2017
Over the past six weeks since the last FOMC policy announcement on February 1, the dollar has appreciated marginally more than 1.0% against the euro and yen, and the 10-year Treasury yield is advanced 9 basis points. Whereas these changes tighten monetary conditions, a 9% net decline in oil prices and a 5% rise in the DOW are stimulative counter-balancing factors.
Three more primary determinants of monetary policy point to a 25-basis point increase in the federal funds target. Indicators of U.S. economic activity have been fairly robust. It’s become a yearly event that despite seasonal adjustments, U.S. growth has lately slowed sharply in the first calendar quarter, but that pattern was avoided in 2017. In particular, labor market conditions have moved closer to a semblance of full employment. Secondly, progress has also been achieved in the second FOMC mandate of securing 2.0% inflation over the medium term. Data on average hourly earnings, consumer and producer prices, and most importantly the personal consumption price deflator confirm this progress. The third strong sign that the Fed will tighten further today can be found in the chorus of public comments by fed officials including Chair Yellen, Vice-Chair Fisher, and N.Y. Fed President Dudley. It is a major goal of Fed policy to communicate shifting perceptions about policy in such a way that monetary policy surprises are minimized. A consensus that a faster pace of interest rate normalization is now favored has been telegraphed without ambiguity. While it looked at the start of 2017 like only two increases this year would likely occur, it now seems that that number will be at least three and increasing four. A first move now and a second one in June would give the FOMC great flexibility to do 3 or 4 increases without rushing the sequence.
The FOMC statement and new macroeconomic forecasts get released at 14:00 EDT (18:00 GMT) followed 30 minutes later by Janet Yellen’s press briefing. The latter event is where the potentially greatest market-moving information will occur.
EUR/$ | $/JPY | 10Y, % | DJIA | Oil, $ | |
06/30/04 | 1.2173 | 109.44 | 4.63 | 10396 | 37.95 |
06/30/05 | 1.2090 | 110.89 | 3.96 | 10370 | 57.00 |
06/29/06 | 1.2527 | 116.07 | 5.20 | 11077 | 73.41 |
06/28/07 | 1.3452 | 123.17 | 5.10 | 13456 | 69.82 |
08/07/07 | 1.3749 | 118.55 | 4.73 | 13510 | 72.27 |
09/18/07 | 1.3888 | 115.75 | 4.51 | 13475 | 81.42 |
10/31/07 | 1.4458 | 115.28 | 4.42 | 13873 | 93.59 |
12/11/07 | 1.4682 | 111.49 | 4.11 | 13645 | 89.78 |
01/30/08 | 1.4792 | 107.31 | 3.70 | 12454 | 91.70 |
03/18/08 | 1.5786 | 98.73 | 3.41 | 12257 | 107.53 |
04/30/08 | 1.5562 | 104.58 | 3.83 | 12953 | 111.54 |
06/25/08 | 1.5568 | 108.37 | 4.18 | 11837 | 133.62 |
08/05/08 | 1.5445 | 108.42 | 3.97 | 11484 | 119.82 |
09/16/08 | 1.4144 | 105.16 | 3.36 | 10936 | 91.18 |
10/08/08 | 1.3625 | 99.87 | 3.50 | 9447 | 87.02 |
10/29/08 | 1.2933 | 97.15 | 3.81 | 9145 | 67.38 |
12/16/08 | 1.3790 | 90.14 | 2.52 | 8687 | 44.14 |
01/28/09 | 1.3253 | 90.01 | 2.61 | 8356 | 42.92 |
03/18/09 | 1.3115 | 98.13 | 2.94 | 7340 | 47.73 |
04/29/09 | 1.3331 | 97.06 | 3.02 | 8194 | 51.05 |
06/24/09 | 1.3984 | 95.43 | 3.59 | 8373 | 68.76 |
08/12/09 | 1.4221 | 96.17 | 3.71 | 9366 | 70.64 |
09/23/09 | 1.4779 | 91.50 | 3.50 | 9859 | 69.13 |
11/04/09 | 1.4884 | 90.75 | 3.51 | 9896 | 80.66 |
12/16/09 | 1.4542 | 89.78 | 3.56 | 10478 | 73.14 |
01/27/10 | 1.4045 | 89.49 | 3.61 | 10148 | 73.31 |
03/16/10 | 1.3756 | 90.64 | 3.67 | 10645 | 81.45 |
04/28/10 | 1.3157 | 94.10 | 3.75 | 11043 | 82.57 |
06/23/10 | 1.2284 | 90.12 | 3.13 | 10307 | 76.50 |
08/10/10 | 1.3107 | 85.85 | 2.81 | 10605 | 79.94 |
09/21/10 | 1.3132 | 85.21 | 2.66 | 10747 | 73.05 |
11/03/10 | 1.4059 | 81.35 | 2.53 | 11174 | 84.59 |
12/14/10 | 1.3423 | 83.37 | 3.38 | 11497 | 88.47 |
01/26/11 | 1.3658 | 82.55 | 3.41 | 12001 | 87.36 |
03/15/11 | 1.3969 | 81.04 | 3.29 | 11815 | 98.09 |
04/27/11 | 1.4665 | 82.63 | 3.36 | 12612 | 112.48 |
06/22/11 | 1.4392 | 80.12 | 2.97 | 12175 | 94.87 |
08/09/11 | 1.4234 | 77.09 | 2.36 | 10993 | 81.76 |
09/21/11 | 1.3778 | 76.34 | 1.93 | 11377 | 86.74 |
11/02/11 | 1.3724 | 78.11 | 2.03 | 11805 | 92.77 |
12/13/11 | 1.3067 | 77.92 | 1.98 | 12130 | 100.20 |
01/25/12 | 1.3027 | 77.96 | 1.97 | 12670 | 98.85 |
03/13/12 | 1.3096 | 82.76 | 2.08 | 13044 | 106.34 |
04/25/12 | 1.3226 | 81.37 | 1.97 | 13096 | 104.13 |
06/20/12 | 1.2693 | 79.28 | 1.66 | 12837 | 83.63 |
08/01/12 | 1.2300 | 78.10 | 1.49 | 13028 | 88.98 |
09/13/12 | 1.2895 | 77.43 | 1.72 | 13342 | 97.60 |
10/24/12 | 1.2948 | 79.75 | 1.77 | 13115 | 85.72 |
12/12/12 | 1.3082 | 83.24 | 1.70 | 13325 | 87.13 |
01/30/13 | 1.3584 | 91.16 | 2.02 | 13949 | 97.63 |
03/20/13 | 1.2948 | 95.65 | 1.94 | 14497 | 92.82 |
05/01/13 | 1.3195 | 97.48 | 1.62 | 14740 | 90.47 |
06/19/13 | 1.3364 | 95.76 | 2.23 | 15304 | 98.38 |
07/31/13 | 1.3301 | 97.92 | 2.67 | 15565 | 105.63 |
09/18/13 | 1.3363 | 98.28 | 2.76 | 15606 | 107.01 |
10/30/13 | 1.3764 | 98.18 | 2.48 | 15660 | 97.42 |
12/18/13 | 1.3696 | 103.81 | 2.89 | 16198 | 98.06 |
01/29/14 | 1.3651 | 102.13 | 2.73 | 15719 | 97.23 |
03/19/14 | 1.3918 | 101.75 | 2.71 | 16335 | 99.96 |
04/30/14 | 1.3868 | 102.11 | 2.66 | 16553 | 99.52 |
06/18/14 | 1.3584 | 101.93 | 2.61 | 16892 | 106.12 |
07/30/14 | 1.3372 | 102.84 | 2.51 | 16878 | 101.45 |
08/17/14 | 1.2961 | 107.60 | 2.57 | 17151 | 94.05 |
10/29/14 | 1.2677 | 108.40 | 2.33 | 16956 | 82.51 |
12/17/14 | 1.2409 | 117.58 | 2.11 | 17201 | 57.85 |
01/28/15 | 1.1337 | 117.77 | 1.78 | 17457 | 44.75 |
03/18/15 | 1.0637 | 120.98 | 2.05 | 17733 | 42.49 |
04/29/15 | 1.1164 | 118.67 | 2.05 | 18039 | 59.16 |
06/17/15 | 1.1255 | 124.22 | 2.39 | 17862 | 59.12 |
07/29/15 | 1.1073 | 123.61 | 2.29 | 17720 | 49.17 |
09/17/15
10/28/15 |
1.1334
1.1081 |
120.86
120.50 |
2.26
2.07 |
16778
17687 |
47.01
45.83 |
12/16/15
01/27/16 03/16/16 04/27/16 06/14/16 07/27/16 09/21/16 11/02/16 12/14/16 02/01/17 03/15/17 |
1.0956
1.0874 1.1089 1.1339 1.1205 1.0998 1.1160 1.1099 1.0641 1.0741 1.0616
|
121.72
118.48 113.70 111.37 106.15 105.65 100.84 103.33 115.37 113.52 114.78
|
2.29
2.02 1.99 1.89 1.62 1.53 1.70 1.78 2.45 2.49 2.58
|
17583
16002 17217 18013 17675 18461 18151 17989 19915 19890 20875 |
35.95
30.85 37.79 44.89 48.29 41.91 43.44 45.18 51.83 53.33 48.40 |
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: FOMC preview