Fed Will Raise 1/4 Point on Wednesday
A: Expect Fed Chairman Bernanke & Co. to raise the fed funds rate to 5.0% on Wednesday with another 1/4 point rate increase. What we need to look for is any change in the issued statement, and certainly expect one, after the mis-communication and Bernanke's first mistake since being elected fed chief.
Ben Bernanke must be clear and concise with this next statement after going through some learning curves with just how seriously the street and other tradable markets cling to his every word. He must learn to CHOOSE HIS WORDS MORE CAREFULLY if he ever wants to continue the same environment that Alan Greenspan created.
WHAT TO EXPECT: 1/4 point rate hike
WHAT TO LOOK FOR: Change in issued statement hinting at an end to future rate hikes. My feeling is he will clearly state that future moves will be DATA-DEPENDENT and will NOT take a hard line towards raising or pausing. If he does steer towards one side, expect it to be towards the side of raising rates again in June; that way he doesn't appear to the markets as being soft during inflation-fearing times such as now.