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Federal Reserve Board Chairman Jerome Powell walks up to speak during a news conference. Photo: Mark Wilson/Getty Images

The market has stopped paying much attention to Fed Chair Jerome Powell's long-range forecasts and the Fed's future guidance and will merely be looking for confirmation of its expectations at this week's Fed meeting.

The state of play: Markets are now looking to data — including the value of the stock market — rather than central bank predictions as the road map for policy.

Background:

  • When Powell and the Fed predicted they would raise rates three times this year in November, the market priced in a 20% chance of it happening and had written that down to 7% by the end of the month, CME Group's FedWatch tool shows.
  • When the Fed lowered that prediction to two rate hikes in December, the market priced in a 9% chance of 2 hikes and by month end had cut the probability to 0.5%.
  • Powell has stressed at every meeting in 2019 that the central bank will be "patient" and "on hold" this year, but the likelihood of that being the case peaked in March at 96% and has fallen since.
  • Fed fund futures prices show investors see just a 1% chance interest rates remain in their current 2.25%–2.50% range by the end of December.
Expand chart
Data: CME FedWatch Tool; Chart: Chris Canipe/Axios

The big picture: Not only does the market see virtually no chance the Fed continues to hold, futures prices show investors see it as more likely that Powell and company cut rates at every meeting this year.

Why it matters: Though no rate changes are expected, with meetings this week from the Fed, Bank of England and Bank of Japan, investors are expecting that central banks will again pivot and signal another round of coordinated global policy easing is coming to flood the world with more capital and liquidity.

  • At this time last year, the market was expecting global coordinated tightening to slow speculation and rein in asset bubbles.
  • There's also growing worry that monetary policy is losing its effectiveness and an expectation that central banks will be forced to resort to more extreme and unusual measures to stimulate the weakening economy.

Flashback: The Federal Reserve looks to be laying the groundwork for interest rate cuts

Go deeper

39 mins ago - Technology

Scoop: Google won't donate to members of Congress who voted against election results

Sen. Ted Cruz led the group of Republicans who opposed certifying the results. Photo: Stefani Reynolds/Pool/AFP via Getty Images

Google will not make contributions from its political action committee this cycle to any member of Congress who voted against certifying the results of the presidential election, following the deadly Capitol riot.

Why it matters: Several major businesses paused or pulled political donations following the events of Jan. 6, when pro-Trump rioters, riled up by former President Trump, stormed the Capitol on the day it was to certify the election results.

Minority Mitch still setting Senate agenda

Illustration: Aïda Amer/Axios

Chuck Schumer may be majority leader, yet in many ways, Mitch McConnell is still running the Senate show — and his counterpart is about done with it.

Why it matters: McConnell rolled over Democrats unapologetically, and kept tight control over his fellow Republicans, while in the majority. But he's showing equal skill as minority leader, using political jiujitsu to convert a perceived weakness into strength.