Assuming little surprise in today’s FOMC statement with respect to their comments on a continued recovery in growth with caveats and their belief that there is little inflation (the only central bankers in the world to believe so), the most interesting aspect to look for is if there will be any dissents on current Fed policy of zero rates and QE2 from particularly the new voting members Fisher and Plosser. In speeches, they have both implied that they are not fully on board with the path the Fed chose with QEDOS. The lone disagreement with Fed policy over the past year, Hoenig, is no longer a voting member. On the inflation front, German Import Prices in Dec rose 12% y/o/y, the fastest pace since 1981 and above expectations of 10.8%. German 10 yr yield is rising to the highest since Apr and the 2 yr yield is at a one yr high in response. Also, the minutes from the last BoE meeting revealed that a 2nd member wanted to raise interest rates because of inflation pressures.
The MBA said refi’s fell 15.3% on the week to a one year low and purchases dropped 8.7% to a 3 month low. ABC confidence fell 1 pt to -44 as the Personal Finance component fell to match its lowest since Aug ’10 but the State of Economy component rose to the best level since Oct ’08. II: Bulls 55.1 v 56 Bears 19.1 v 20.9, bears match the lowest since Apr ’10.