Week ahead: Wall Street eyes Fed bond buys

Taper talk will be the focus this week as the Federal Open Market Committee (FOMC) releases its hotly anticipated monetary policy statement at 2 p.m. Wednesday.

All eyes will be on Federal Reserve Chairwoman Janet Yellen, who is set to give her second press conference at 2:30 p.m. following the FOMC’s release.

The central bank is expected to announce it’ll continue to reduce its monthly bond purchases, as it has done for each of the last four previous meetings, citing continued economic growth.

Fed watchers will look for clues to see when the central bank will begin raising interest rates — the first time such action has occurred since 2006, pre-financial crisis. Most economists predict that won’t come until the end of this year or early next.

On Tuesday, San Antonio Mayor Julián Castro will testify before the Senate Banking Committee for his confirmation hearing to be secretary of Housing and Urban Development.

Republicans on the Banking Committee are likely to press him on a HUD inspector general report that found that San Antonio under Castro’s rule mishandled $8.6 million in agency appropriations.

It’s the first opportunity for Republicans to put Castro in the hot seat following his well-received speech at the 2012 Democratic National Convention. Pundits have buzzed that Castro, 39, could be a potential vice presidential pick on a 2016 ticket. Castro is expected to be confirmed by the Senate.

Castro’s confirmation won’t be the only fiery Hill hearing during the week. Consumer Financial Protection Bureau (CFPB) Director Richard Cordray will face the House Financial Services Committee on Wednesday. That same afternoon, the panel will host another CFPB hearing.

Republicans on the committee have ripped into the consumer agency, charging it with being a “rogue regulator” with little congressional oversight, and investigated allegations of racial discrimination, overspending and wasteful spending.

Speaking of spending, the biggest of all the spending bills, the $491 billion Defense measure will be on the House floor starting Wednesday. It, and numerous amendments, will be before the House Rules Committee on Tuesday.

The Senate is slated to take up its appropriations bill that funds the Commerce, Justice and Science (CJS) agencies. Not included: funding for the Affordable Care Act, which could have left vulnerable Senate Democrats facing difficult votes ahead of November’s midterms. The House CJS bill will be the vehicle in the Senate for the funding.

The frantic search for funds for the Highway Trust Fund, expected to go bankrupt in August, is likely to intensify this week.

The House GOP proposal to shore up the trust fund with savings from limiting six-day mail delivery, panned by Democrats and postal unions, has yet to hit the floor after facing skepticism from even some Republicans.

In the Senate, there is talk about a corporate tax holiday that interests both Majority Leader Harry ReidHarry ReidGOP frustrated by slow pace of Trump staffing This week: Congress awaits Comey testimony Will Republicans grow a spine and restore democracy? MORE (D-Nev.) and Sen. Rand PaulRand PaulSenate gears up for fight on Trump's 0B Saudi Arabia arms sale Paul: 0B Saudi arms deal ‘a travesty’ Senate feels pressure for summer healthcare vote MORE (R-Ky.). But the leaders of the tax-writing Finance Committee aren't fans of tying the idea to highway funding.

The U.S. Commodity Futures Trading Commission is slated to host a daylong public discussion on trading limits for derivatives of physical commodities, such as oil or minerals, on Thursday. Sure to draw industry fire? A proposal CFTC officials put out in November that limits the number of commodity contracts for a company.

Sen. Carl LevinCarl LevinDemocrats and Republicans share blame in rewriting the role of the Senate For the sake of American taxpayers, companies must pay their fair share What the Iran-Contra investigation can teach us about Russia probe MORE’s (D-Mich.) Homeland Security subcommittee will host a hearing on Tuesday about high-frequency trading, which has received increased scrutiny following the release of Michael Lewis’s Flash Boys book.

--Bernie Becker contributed to this report.


Recent stories: 

- House votes to extend expired tax breaks: http://bit.ly/1oYEbhb

- Hensarling opts out of GOP race: http://bit.ly/TTAldB

- Dave Brat on capitalism, Christ and Hitler: http://bit.ly/1lihA9n

- Business groups await hearing for insight into Ex-Im’s future: http://bit.ly/1ugN05q

- GOP bashes Obama on debt while vetting budget nominee: http://bit.ly/1qvMjF6

- Senate to provide $1.9B for rise in child migrants: http://bit.ly/1mEEWXZ


Connect with The Hill’s finance team – Write us with tips, suggestions and news: vneedham@thehill.com; pschroeder@thehill.com; ewasson@thehill.com; bbecker@thehill.com; kcirilli@thehill.com.

--Follow us on Twitter: @VickofTheHill; @PeteSchroeder; @elwasson; @BernieBecker3; and @kevcirilli.