FT Alphaville " Markets Live special edition - FOMC presser The Bernanke Bowl, Fedstock, Fedapalooza, Ben and Fed's Excellent Adventure. We wouldn't bring back the cheesy nicknames for just any FOMC presser, but given the unveiling of the federal funds rate forecasts for the first time ever, this one promises to be interesting. So bring your scorecards as we critique the questions asked by Jon "Fedwire" Hilsenrath, Greg Ip, plus the usual assortment of lunatics from cable television. Though we'll tolerate no mockery of our man Robin "Hip Specs" Harding. We're kicking off at 2:10pm New York time (7:10pm in London), five minutes before the printer breaks presser begins. The usual place. In all seriousness, this is an important meeting. Expect the rate forecasts to hog the attention, but there's a chance for another surprise or two. Nothing like QE3, which won't be seriously considered until a later meeting. But the FOMC statement itself, which is released at 12:30pm EST, will have the language about rates remaining exceptionally low until at least mid-2013 either changed or removed. The Fed might also present a statement of objectives meant to add clarity and specificity to its dual mandate, and in particular could move closer to making the implicit two per cent inflation target an explicit long-term goal. We explained in detail the many issues surrounding the federal funds rate projections in a post yesterday, but here's another preview from Goldman's Jan "hope Dudley's keeping the seat warm" Hatzius: Q: What will happen on Wednesday? 12:30 pm: The regular FOMC policy statement. 2.00 pm: Materials from the Summary of Economic Projections (SEP). These will include: An expanded version of Table 1 showing the range and central tendency-the range excluding the top 3 and bottom 3 entries-of the 17 FOMC meeting participants" projections for real GDP growth, the unemployment rate, the headline and core PCE price index, and presumably the federal funds rate, by year through the end of 2014 as well as for the "longer term." There will be no "longer-term" projection for the core PCE index. The entire distribution of 17 projections (without attribution) for the federal funds rate by year through the end of 2014, as well as the "longer term." The entire distribution of 17 projections (without attribution) for the year of the first rate hike through 2016. Somewhat to our surprise, the template for the projections released on Friday afternoon suggests that the date of the first hike will only be specified in annual terms; we had expected quarterly or at least semiannual information. 2.15 pm: Opening statement for the chairman's press conference. Q: Will we get a qualitative discussion of the outlook for the Fed balance sheet? A: Probably not until the full SEP is published on February 15, alongside the FOMC minutes. However, Chairman Bernanke might reveal some of the committee's thinking in the press conference, which is virtually certain to feature questions about the outlook for the balance sheet. Q: Anything else? A: The FOMC might also release a statement about its longer-term monetary policy goals and strategy. This would probably involve an explicit-but flexible-inflation target formulated as a headline PCE inflation rate of 2% over the medium term, but with room for significant deviations in the shorter term. We do not view this as a big change relative to the current language about the "mandate-consistent" inflation rate. In order to counteract the impression that this is a "hawkish" shift, we believe the committee would also find a way to strengthen the employment side of the dual mandate, perhaps by talking about a target of zero for the gap between the unemployment rate and its structural level (i.e. the "longer-term" projection in the SEP). It is clear that some type of statement is in the works. However, we do not know whether it will already be released on Wednesday or at a subsequent meeting. The minutes of the December FOMC meeting were noncommittal on timing, and remarks by some Fed officials in the meantime had pointed to a later date. But an article by Jon Hilsenrath in the Wall Street Journal on Friday suggested that the statement might be ready to go after all. This entry was posted by Cardiff Garcia on Wednesday, January 25th, 2012 at 15:45 and is filed under Capital markets. Tagged with ben bernanke, FOMC, markets live.