Fed's removal of ‘patient’ does not automatically mean a June rate hike likely

The FOMC meets on 17-18 March: the post-meeting statement and the updated projections will be released at 14:00 ET on 18 March and Chair Yellen will give a press conference at 14:30 ET.

Standard Chartered notes its views as follows:

• We think it is very likely the Fed will remove the "patient" guidance from thestatement, as it seeks to move towards a more flexible, data-dependent framework.
  
  
• Recent strong job growth provides justification for this transition now. We do not think this removal means a hike in June (the next meeting with a scheduled press conference); after all, pre-commitment is precisely what the Fed wants to avoid. 
  
  
• The data will be key. We believe the Fed will wait until September to raise rates, after year-on-year core PCE inflation finds a floor and more evidence accumulates that wage growth is on a sustainable uptrend. 
  
  
• We expect Yellen's press conference to sound dovish by emphasising these two parameters (wage and inflation) as central to the Fed's reaction function, along with job growth and GDP data.