How “patient” is Yellen?

Rioting at the ECB’s new Frankfurt headquarters broke out Wednesday morning. I’m not surprised.

The Federal Reserve will conclude its two-day meeting this afternoon and will release its statement at 2pm EDT Wednesday.

Yellen and company are teetering on the edge of the knife.

If the Fed leaves the word “patient” in its statement — meaning the Fed does not see a rate rise by June — then dollar/euro should move to parity sometime this week.

The alternative would be to remove the word but to say the Fed is “data dependent” and will access the rate rise at its next meeting.

The Fed will have to walk back very strongly a June date on the rate rise despite the patient phrasing.

Here’s the razors edge. Yellen & Co. needs to weaken the dollar, without raising rates. It’s very difficult to accomplish both in this economic environment.

The dollar — playing the cleanest dirty shirt in the pile — is causing the sturm und drang as imports rise and the buying power of the euro shrinks.

That in turn is creating the rioting outside of the Frankfurt HQ.

Let’s see how Ms. Yellen handles today’s announcement.

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