Stocks closed higher again yesterday as banking fears continue to ease.

There's also hope for a more dovish Fed statement this afternoon.

The consensus is still for a 25 basis point hike. But some are hoping to hear the Fed suggest a pause afterwards. Or lower their forecast for their terminal rate projections.

At the last meeting, they had suggested rates could get as high as 5.1%. But in Mr. Powell's testimony before Congress earlier this month, he suggested it could get as high as 5.50%.

That had more hawkish analysts calling for 5.75%, and even as high as 6.00%.

Whether they come outright and say they'll pause or not, or lower their terminal rate forecast or not, the fact remains that the next FOMC announcement isn't until May anyway (May 3), which is 6 weeks away. And a lot can happen in 6 weeks that could influence their decision.

Again, just a couple of weeks ago, the Fed was suggesting that rates may need to go higher than previously expected. The same for many others. Now we're having a totally different conversation about rates possibly ending lower than expected. So a lot can change in a 6 week period.

And so can the data. We'll get two more PCE inflation reports before then, and one more CPI and PPI inflation report as well.

I have heard some people suggest that the Fed might even cut rates this year. I think those ideas are quite premature. And if the Fed suggested that, I think it would have a negative effect on the market. Why? Because they would be signaling that they think things are going to get a lot worse. And we still haven't won the inflation fight yet. So, in my opinion, any talk of cutting rates right now, I think, would be bad news for the market.

In other news, yesterday's Existing Home Sales report came in better than expected with a 14.5% m/m increase at 4.580 million units (annualized) vs. last month's 4.000M and views for 4.170M. On a y/y basis, sales are down -22.6%. But that is an improvement vs. last month's -36.9% pace.

Today we'll get another look at housing with the MBA Mortgage Applications report.

But the main event will be this afternoon's Fed announcement. That comes out at 2:00 PM ET, with the customary Fed Chair Press Conference to follow at 2:30 PM.

Should be another busy day.

See you tomorrow,