Talking Points:
• The March FOMC rate decision is a milestone for the Dollar and broader investor sentiment
• An 8 month rally for the Greenback shows clear expectation but the S&P 500's heights reflect complacency
• Traders will hone in to the word 'patient' in the statement, but the implications run much deeper
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Will the Federal Reserve signal to the market that it is gearing up for a June rate hike by removing a single word from its statement? Would tacit confirmation of that time frame necessarily drive EURUSD below parity or finally tip the S&P 500 into reversal? The upcoming FOMC meeting - complete with updated forecasts and Chairwoman Yellen press conference - is an important milestone in the market's assessment of a Fed policy shift. Working under the assumption that the group will continue its efforts to telegraph its intentions and acclimate the markets in a controlled way, investors are looking to a single word ('patient') to signal whether the Fed will start to tighten policy in three months time. However, the implications from this event run far deeper than the timing of the first hike, short-term market volatility or even the impact to just the Dollar. We discuss what to look for, different scenarios and what markets stand to experience the biggest impact from the FOMC in today's Strategy Video.
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