by Calculated Risk on 1/27/2015 09:01:00 PM

I don't expect much to change in the FOMC statement. I expect "patient" to remain:

"Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy."

And this sentence will probably be dropped (it seemed like a one time transition sentence):

"The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."

The major data flow has been consistent with the FOMC's view; the consensus estimate of Q4 GDP is at 3.2%, and the December employment report was solid (252 thousand jobs added, unemployment rate declined to 5.6%). Inflation too low is an ongoing concern, but overall I think the FOMC will be, uh, patient.

Wednesday:
• At 7:00 AM, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 2:00 PM, FOMC Meeting Statement. The FOMC is expected to retain the word "patient" in the FOMC statement