The Federal Reserve meets tomorrow, a meeting that we think will largely be a non-event in the immediate term. In our view, the most important signals we think we can get from the Fed are clarifying the conditions necessary for balance sheet tapering. As of right now, we see no signs of slowing in the Fed’s balance sheet expansion. Reserve creation continues to be abundant, creating huge amounts of USD liquidity:

While this reserve creation is indeed immense in a domestic setting, it is being outpaced in an international setting by the EU, which needs monetary aid to keep its economy running:
Overall, we expect the value of this meeting to be in helping understand the future path of the Fed and its monetary programs. While markets may move intraday, the fundamental outlook is unlikely to shift.