Last week, rates ended about where they began.  This week however is jam packed with news that can cause rates to move in a hurry.  In addition to the Fed's Open Market Committee meeting slated for Wednesday, the Fed's favorite gauge of inflation is scheduled to be released on Thursday, and if that wasn't enough the all important Jobs Report is due out on Friday.  So will rates become more turbulent or is this just what the doctor ordered to push then lower? 

This week's economic calendar is chock full of potentially market moving releases.  On Wednesday, the FOMC meeting will be held where the Fed will likely lower rates again.  However, many experts are predicting it will be only by 25 bps as the fed walks a tightrope trying to stimulate the economy but avoid inflation. As always most eyes will be focused on the wording in the statement that follows the Fed's meeting.

On Thursday, the day after the Fed's meeting and possible rate cut the Personal Consumption Expenditures (PCE) report is due out, which is the Fed's favorite measure of inflation.  With this report due out after the Fed announcement it may give the market a chance to "Monday morning quarterback" the Fed's move the prior day.

The week raps up with two key reports on Friday, the ISM Index and the Job's Report which many are expecting to show a negative growth rate to the tune of 80,000 jobs lost.

In some ways the Fed is in a no win situation, if they only lower rates by 25 bps and inflation appears in check but the jobs take a 80,000 loss many will say the Fed didn't do enough.  However, if the PCE whiffs of inflation and jobs show better than a 80,000 loss it will appear the Fed is fanning inflation with the 25 bps cut.

The bottom line: Expect rates to be volatile, hang on to your hats!