We asked traders, "The Dow Jones surpassed both the 17,000 mark and 18,000 mark for the first time in its history in 2014. What is more likely in 2015, the Dow hitting 20K or a major correction of 10-20%?"
The latest regional manufacturing survey from the Philadelphia Federal Reserve appears lacking in conviction one way or the other. The regional survey pointed to a less upbeat view from respondents as opposed to a more downbeat reflection.
If the collective consensus is for an adjustment in policy rate at the June meeting, Fed officials have more communication work to do to help market participants understand that. Otherwise, a September move looks more likely.
As we noted in this morning’s FOMC minutes preview, traders were poised for the Federal Reserve to pave the way to potential rate hike as soon as June this year. As it turned out, the minutes did show a surprisingly dovish Fed, and as a result, the world’s reserve currency is seeing a modest dip in the immediate wake of the release.