by Calculated Risk on 1/26/2016 09:15:00 PM

From Tim Duy at Bloomberg: The Five Scenarios Now Facing the Federal Reserve

Bottom Line: If there was ever any doubt about the “about” of this week’s FOMC meeting, it has long since been eliminated. The Fed will hold policy steady and affirm the faith in its underlying forecast while acknowledging the global and financial risks. This will be interpreted dovishly, probably more so than the policymakers at the central bank would like. Given that I’m in the “no recession” camp, I am wary that the Fed falls into risk management mode now, but at the cost of a faster pace of hikes later. Of course, if you’re in the “recession now” camp, then the game is already over.

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

• 10:00 AM, New Home Sales for December from the Census Bureau. The consensus is for a increase in sales to 500 thousand Seasonally Adjusted Annual Rate (SAAR) in December from 490 thousand in November.

• 2:00 PM, FOMC Meeting Announcement.  The FOMC is expected to make no change to policy at this meeting.