OVERNIGHT FINANCE: All eyes on the Fed

WEDNESDAY'S BIG STORY:

Fed decision time: The Federal Reserve will wrap up two days of meetings on Wednesday with an expected announcement that the central bank will continue trimming its massive economic stimulus.

While a modest cut in the bond-buying spree is expected, there should be other issues to explore in the Fed’s statement from the condition of the housing sector to the labor market. 

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The taper of asset purchases will probably continue on the $10 billion pace, dropping them to $45 billion a month.

Fed Chairwoman Janet Yellen won’t hold a press conference this time around but the policy statement always provides some insight into what’s being bandied about in the meetings.

After months of severe winter weather, it will be interesting to see how much policy officials think the cold spell subdued economic growth through the first quarter of the year.

The policy statement will follow a morning announcement about the pace of economic growth in the first quarter. Estimates are running around 1 percent. That's anemic but no surprise as economists have forecast that the bad winter would weigh on the economy's slow expansion.

But the question is whether the policy officials will acknowledge any improvement in the economy since the last meeting in March?

Hiring has picked up — April jobs numbers are out Friday and the private sector figures are out on Wednesday — and seems to have managed to emerge from the deep freeze.

But the housing market hasn't fared so well.

The housing sector hit some bumps through the winter and it hasn’t exactly sparkled since then. Fed officials called the housing recovery "slow" in March and they may express some additional concern about the sluggish pace of its pick up since then. 

Otherwise, without any major changes, the Fed is likely to maintain its interest rate policy and hold it in place until the economy shows sustainable consistent improvement. 

WHAT ELSE WE’RE WATCHING 

Spending plans on tap: A House Appropriations subcommittee will mark up the Commerce, Justice, Science bill, which provides $51.2 billion in funding, a cut of $398 million below the current level.  

The Justice Department would get an increase of $383 million to $27.8 billion under the legislation, while the FBI gets $125 million more for a total of $8.5 billion.

On the Senate side, Treasury Secretary Jack Lew, IRS Commissioner John Koskinen and Treasury Inspector General for Tax Administration J. Russell George all will testify before the Senate Appropriations Committee about the budgets for their agencies.

Three other Senate Appropriations subcommittees are in action on Wednesday and will look at the budget requests for the Forest Service, Department of the Army and the Education Department with Education Secretary Arne Duncan on hand to discuss spending plans for next year.

Poverty challenges: On Wednesday, the House Budget Committee will explore how to best tackle the nation's struggles with poverty. That hearing comes the same day that Chairman Paul Ryan (R-Wis.) is set to meet privately with members of the Congressional Black Caucus, who were upset when he suggested last month that inner city communities do not put enough emphasis on a culture of work.

Policy analysis: The Joint Economic Committee will meet Wednesday with a handful of experts and industry members to explore how the government analyzes policy and discuss whether there’s a better way when it comes to regulation.

SBA spending: The House Small Business Committee will discuss the spending habits of the Small Business Administration with several witnesses from the agency. 

ECONOMIC INDICATORS

Gross domestic product (GDP): The advance estimate for first quarter economic growth will be released Wednesday with the consensus forecast around 1 percent, down from 2.6 percent in the final three months of last year. Severe winter weather is the expected culprit behind the anemic figure. Economists are expecting growth to pick up pace and end the year at a 3 percent annual rate. 

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.

ADP National Employment Report: Automatic Data Processing (ADP) will release its April report for private-sector job growth, which could come in above the March figure of 191,000.  

WHAT YOU MIGHT HAVE MISSED

MasterCard lobbying on bitcoin

— House panel subpoenas CFPB officials on discrimination claims

— Obama cheered for embracing tolling in transportation bill

— Coons, Hatch push bill to provide better protections for trade secrets

— White House: Veterans health funding too low in House bill

— SEC chief: 'The markets are not rigged'

— Consumer confidence slips in April

— Lew defends Obama marijuana policy at House hearing

— Senate Banking clears Fed picks

— White House: Veterans health funding too low in House bill

— Leahy defies WH on Egyptian military aid

— Senate Banking delays housing finance markup

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