2015-09-17 00:00 The FOMC is finally upon us so what will they give us this time?The financial world has been going FOMC crazy here's roundup of stories we've brought you recently;ANZ expect a rate hike from the FOMC ... but beware a government shutdownMitsubishi UFJ says no FOMC hike this timeCiti has 2 FX plays for trading the FOMCJPMorgan says the FOMC decision on Thursday is a coin flipRBC "holding out hope" that the Fed will hike this week. Goldmans still looking at DecemberGoldman Sachs previews the Federal Reserve decision on Sept 17Adam also picked some very good bones from the Fed minutesThe crucial question in the FOMC minutesFed Minutes leaked early: Most Fed officials said hike still not warranted by conditions approaching that pointYellen & Co have previously said they wanted to see more from the economy and have pinpointed, housing, Jobs and wages, so how have they all done since the last meeting?JobsWages/IncomesReal Average weekly earnings y/yHousingInflation is always a big topic but as highlighted by Adam's post above, may be something the Fed are willing to give a little bit of leeway to. Here's the CPI picture right up to yesterdayAnd so to the economy as a wholeThe big questions is whether the US is in a better place than it was in June and JulyOn the face of it there's been improvements but they've been steady and not spectacular. Unemployment continues to fall, wages and incomes are rising, housing is steady, Core CPI is holding up, GDP is steady. In fact, "steady" is probably the correct description for the US economy right now.Is "steady" enough for the Fed to hike rates today?Based on their recent rhetoric, no. The issue I have is that they've pulled a different 'must do better' rabbit out of the hat at the last few meetings. They are reeling out the excuses as to why they don't want to hike. That might be seen two ways;They're really not sure about the economyThey want to wait until the last possible moment before raisingAt some point they will run out of those types of excuses and repeating them will have the market thinking that they'll never hike unless things start to boom, and that's not going to happen. The market has been very patient with the Fed and it's not normally a patient creature. At some point it's going to say WTF? to constant excuses of why they're not hikingI'm on the fence as to whether they hike or hold today. As above they don't seem to be in a rush but then when will be a good time? I already think they've missed the boatWhat we do know is that each meeting that goes by without hiking the more expectant the market gets next time, and the greater the volatility is. It's a pressure valve building and if the Fed are worried about market ripples from their actions then they need to be aware of the potential monster they're creating. It's going to be messy whatever they do but markets will get over it and settle themselves down into the next trend, whatever that may be.For trading it we've got to be careful. I still think the best trade will be after a hike, unless you're already long USD into it, but even then I'd be cautious. There's a lot of people waiting for this potentially last blast in the dollar and the resulting exit could be very messy. I'm still long from my BOJ dip and have got the nice buffer I was hoping for. I've locked my profit in at 119.90 and will move that right up to 120.50 (or thereabouts) into the meeting. I'm also going to think about taking half off just so I've got some profit bankedFor trading over the meeting, that's going to depend on the details and what's said at the presser but lets look at the possible outcomes;No hike and a dovish tone will sink the dollar sharply but we know it likes to come roaring backNo hike but a hawkish tone and longs can ride the train a while longerHike and dovish on future hikes and it might be time to ride the kneejerk and then pull the parachute chordHike and hawkish on another quick hike and a jump might last a few sessionsEither way, both sides of the trade are going to be watching very carefully. Best of luck to you all and stay safeAll eyes on the old girl at the FedSource link:
http://news.forexlive.com/!/forexlive-fomc-preview-time-for-sense-or-more-excuses-20150917
