FOMC preview, part II

Further to my last post (see Watch the reaction, not just the Fed), I got a number of questions that asked if there are any factors or nuances from the FOMC statement or subsequent press conference to watch for.

Firstly, I reiterate my point that the reaction to the Fed is far more important to the future direction of stock prices than the Fed statement itself. I expect that the Fed will try very hard to remain apolitical and refuse to react to any possible changes in fiscal policy until they are actually announced. Nevertheless, I will be watching if the committee makes any references to:

• The strength of the US Dollar; and
• Any possible changes in the projected path of inflation.

How the Fed views these factors will influence affect the pace of interest rate normalization in 2017.

The full post can be found at out new site here.