Fedwatching will be a boring job in the months ahead with the taper on autopilot and rate hikes at least a year away. The economy, rather than the Fed, will be what drives trading.
WSJ Fedwatch Jon Hilsenrath is out with his post-jobs analysis and it reiterates the $10 billion pace of the taper.
Fed Chairwoman Janet Yellen and other Fed officials believe economic data have been soft in recent months because of bad weather.
The most interesting Fed discussion is in regards to changing forward guidance. The Fed’s current threshold for changing policy is 6.5% unemployment but with so many factors, namely lower labor force participation, contributing the falling unemployment the Fed will change its rhetoric to something qualitative that gives them some wiggle room. The Fedwatchers will be writing about those subtle changes in the months ahead but it won’t be a market focus.