MBS Day Ahead: Fed Day! Same Game-Plan as October?

Posted To: MBS Commentary

Fed has history of using off-cycle meetings to set stage for policy action OK, so it has only happened one--maybe two--times. Is now one of those times? I'm not sure if this term is common parlance when referring to the FOMC Announcements that are NOT accompanied by the periodic press conference and economic projections (aka "dots"), but I have been referring to them as "off cycle." No matter what words we use to distinguish the two types of Fed Announcements, market participants almost unanimously agree on one thing: the Fed is vastly more likely to make policy changes at "on cycle" meetings (those that DO include the Yellen press conference and the dots). The reason for this theory has most to do with the press conference. Markets logically conclude bigger...(read more)

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