Still not ready to cut just yet/We await balance sheet thoughts

Acknowledging the Q4 GDP report the Fed said that “economic activity has been expanding at a solid pace.” This versus “economic activity has slowed from its strong pace in the third quarter” seen in the December statement.

Interestingly on the day New York Community Bank has its stock down 40%, the Fed took out the wording, “The US banking system is sound and resilient” likely on the belief that it goes without saying I guess but maybe premature to assume for some. They also took out the wording on “Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring and inflation” likely because we’ve seen a complete 180 when it comes to financial conditions. The Fed likely didn’t want to acknowledge the easier conditions so as not to distract when and by how much they will cut rates this year. Not very symmetric thinking of course.