If there's one thing that's featured heavily over the past few years, it is Fed excuses not to do something
Weather, housing, jobs, international markets, dog ate the dot plot, you name it and they've used it.
If Yellen wanted something to use to paper over the last two jobs reports then Brexit fits the bill perfectly. Brexit worries have been raised by some Fed members and brushed off by others.
In the April statement they removed text about global events posing risks. That could well come back in with Brexit at the head of it.
We know that the jobs picture wasn't really that bad, outside of the headline NFP but the longer the Fed leaves the next hike, the higher the risk in seeing even more flattening of the labour market. Mr Poo will be colliding with Mr Fan in a big big way if the June NFP's drop another clanger.
The rest of the economy is plodding along. It would have been preferable to have had tomorrow's CPI data out today so I'll repeat that we should be looking for any clues about that from Yellen.
The market has all but washed out action for tonight, it's just the level of hawkish or dovishness were going to get. After tonight the Fed only has four more meetings to squeeze in their supposedly favoured 'two more hikes'. The hawks who wanted three or four are out the picture. It took them nearly six months to hike and it's been six more since then. I can't see them fitting two more in at their current pace.
Maybe that's the plan all along, to long the hikes out for as long as possible, to maintain their gradual path. It's only the market that's been getting excited about a steeper path.
If Yellen is hawkish for another hike (or more) this year then the last four meetings are going to see an increasing squeeze on expectations.
No action and a flattish/dovish message tonight is going to hit the dollar. In fact, it's going to take something really hawkish to change its current mood and if that's not broken, I can see 100.00 before I can see 110.00 as the next big number traded in USDJPY.
I'm still liking the 1.1100 level in EURUSD and it looks close enough to be a good stretch point for any hawkish noise. As I mentioned this morning, a big move in GBPUSD could be a gift horse for some of those big hedgers, whichever way it goes.
It would be an outlier if the Fed hiked tonight. If they wanted to assert their authority then they'd stick two fingers up at the excuses and pull the trigger. Either the economy is ready for a hike or it's not and waiting one more month is hardly going to make a difference.
All that's left is to try and predict the Yellen "so" count. I'll make you 35/45, are you buying or selling?
Is Yellen set to 'crush it' at the FOMC?