What the Fed Will Tell Markets This Week

×
Janet Yellen makes her first appearance before Congress as the chair of the Federal Reserve
J.M. Eddins Jr./MCT via Getty ImagesFederal Reserve Chair Janet Yellen.
By Alex Rosenberg

The Federal Reserve is set to release the minutes from its January FOMC meeting on Wednesday, and market participants are sure to closely sift through them for any clues about the future of quantitative easing.

"The minutes are going to be important, and there's always some morsel that people tend to gravitate toward," said Deutsche Bank's (DB) chief U.S. economist, Joseph Lavorgna. "My guess is that in these minutes, it will relate to the outlook."

For any group that relies on economic data to determine its next move, this is a difficult time. Two straight employment reports have shown markedly weak gains in nonfarm payrolls (113,000 in January and a marginally adjusted 75,000 in December) but the extent to which bad weather adversely impacted those numbers is being rigorously debated.

New Fed Chair Janet Yellen, for one, told the House Committee on Financial Services on Tuesday that she was "surprised by the weak jobs reports in December and January, but we have to be careful not to jump to conclusions when interpreting what those reports mean -- there were weather factors -- we've had unseasonably cold temperatures that may be affecting economic activity in the jobs market and elsewhere.
The Committee will meet in March. We will have a broad range of data on the economy to look at, including another jobs report."

However, LaVorgna points out that the February employment report could also be marred by weather conditions, given that last week's massive storm came on a survey week for the report.

Ironically, the storm even caused the Senate Banking Committee to postpone the second day of Yellen's congressional testimony, which had been planned for Thursday.

The Fed's minutes could consequently shed some light on exactly how much weakness the FOMC needs to see before it deviates from its course of tapering quantitative by $10 billion per month.

"The minutes will probably round out some of the things Chair Yellen said [in her testimony]," LaVorgna told CNBC.com. "She said the Fed won't deviate unless there is a material markdown of outlook. That tells me that weather considerations aside, the Fed probably won't deviate from their plan in March, and that's what I'm guessing will be the message in the minutes."

This could put a bid under the market, some traders say.

"I think we're all going to be focused on the language of the minutes yet again," said Jeff Kilburg of KKM Financial. "The Fed's been driving the market for a long time, and Yellen still has the wheel."

The minutes, which are slated for release at 2 p.m. Eastern time Wednesday, will shed light on the decision-making and debate that marked former Fed Chairman Ben Bernanke's last meeting, which was held Jan. 28 and 29.

As for the Fed's next move, that will be announced on March 19, after the next FOMC meeting.


More from CNBC


Janet Yellen Revealed These Three Things We Didn't Already Know

Increase your money and finance knowledge from home

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »

Add a Comment

*0 / 3000 Character Maximum

8 Comments

Filter by:
rence_reboredo

Whoever it was on here that recommended the website Bionic Traders I want to say thanks. You are right they have been very helpful to me in learning to trade. I now have hope that I can quit my job and trade full-time. Trading is not as hard as I thought it was but it helps to learn from the right place.

February 25 2014 at 7:32 PM Report abuse rate up rate down Reply
Iselin007

Sometimes you have to tell related news about Companies that really have significant information because many others may not have been born at that time and have no knowledge of what took place between a companies divisions.

February 18 2014 at 1:27 PM Report abuse -1 rate up rate down Reply
Iselin007

After the CBS Fender Divison filed Bankruptsy Fender Executives bought new machines as they could get the old equipment back. Fender regrouped and researched their old models that already were sold and began making guitars again in a Custom Vintage Shop. The New Fender company had forgot to fill my order for one of the new 62 reissue Straticasters guitars in Fiesta Red. Lou Rose Music complained to the Fender staff and Fender had to give me one of the new Guitars in my color from the NAM show. The guitar is so rare because it was one of the earliest production models it does not have the Vintage Guitar logo on the plate! The Serial Number and my dated receipt shows it was likely a prototype built mainly for the show. The neck date says 1985 an was ment for the 1987 release date for the general public. I kid you not I was on the phone at Lou Rose Music and spoke to the Fender staff my self. I had also ordered the two/tone model which was made in 1986 for the public release date in 1987 but has the Custom Vintage logo on the back plate! So there you have it one of the few Custom Vintage Shop Fenders made in late 1985 in Fiesta Red with a regular serrial number plate!

February 18 2014 at 1:02 PM Report abuse -1 rate up rate down Reply
Iselin007

Really these company's employees ought to keep track of the business's the corporation owns. CBS employees were unaware that their corporation had owened Fender but when the division filed for Bankruptsy back in the mid 1980's a few New CBS/Fender guitars were still on the racks in the stores. I found one of the limited edtion CBS/ Fenders at Lou Rose Music while checking on a order. The Red Marble Standard American Stratocaster one of a few 100 made sporting one less control knob is now worth over $3,000 used. So happens my purchase was put into storage and should be one of a few never used! Can you say $10,000 dollars?

February 18 2014 at 12:32 PM Report abuse -1 rate up rate down Reply
Iselin007

May be they are reading from a script like the call centers?

February 18 2014 at 11:38 AM Report abuse +2 rate up rate down Reply
xiaogermaine8

I am very disturbed how AOL on NBC and HUFFPOST articles creates ways of not allowing people to post comments. Janet Yellen supriesd on weak economy! WOW. So is NBC?

These OB appointees have no business experience and the only two that have were mid level. This new Corporation called US Government all millionaires that take tax payers dollars is built on accountability is a suprise NBC?

I want to know what is going on in the country not NBC's pink costume stories and telling me what to think about the late night host, and on so much to do about nothing. No wonder American children rank 23rd. below other countries in education.

Keep them dumb Social News in order to buy their votes. The social news can even tell them who to like and god forbid anything bad about OB. Not a chance these news organizations are going to address the real issues and be honest. Yah pot is really healthy as OB says so please Janet smoke lots of it!

300 Million dollrs to Holowood in the farm bill and not a word from NBC. UGH

February 18 2014 at 7:46 AM Report abuse rate up rate down Reply
2 replies to xiaogermaine8's comment
Iselin007

NBC is owned by COMCAST.Since COMCAST owns CNBC they can inject their views on their owners stock!

February 18 2014 at 11:43 AM Report abuse +2 rate up rate down Reply
Iselin007

Where have you been, NBC and CNBC are both owned by COMCAST an each one has a liberal or a conservative view! Not bad they can play off each other.

February 18 2014 at 11:59 AM Report abuse rate up rate down Reply
1 reply to Iselin007's comment
Iselin007

Comcast is trying to get Time Warner Cable, so what is next gobble up Bloomberg, and then swallow up the FOX Business News?

February 18 2014 at 12:04 PM Report abuse rate up rate down