From Bruce Krasting:
Next Wednesday, between 12:30 P.M. and 2 P.M., we will get a ton of new information to digest and analyze. The Federal Reserve will make a series of statements while unveiling its new communication effort. A portion of the new information will be contained in the revised Summary of Economic Projections (SEP).
The Fed has worked long and hard on its new communication policy. The question is, "What will people think and how will the markets react?" I believe that there is a very good possibility that the Fed's plan will add to uncertainties regarding monetary policy. Contrary to its objectives, the new "openness and clarity" may end up causing the confusion.
The Fed will provide information regarding member's thinking on the future size of the Fed's balance sheet (BS). This is critical. We might see a consensus view that the Fed’s balance sheet will grow another 25% over the next 18 months. That would bring this headline:
Fed Signals Another $1T Of QE
Stocks rise sharply. Oil, copper, gold see largest one-day rise in two years
TIPS spreads widen to 2.5%
We could just as easily get a consensus opinion that the Fed's BS will...
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More on the Federal Reserve:
The big news from today's Federal Reserve announcement
The Federal Reserve could be about to crash the market again
Jim Rogers: More federal reserve money-printing is about to begin
