After a Federal Reserve statement and press conference that may have provided more questions than answers, and produced oddly divergent reactions in the stock and bond markets, investors will look to this week's heavy docket of Fed speakers to provide clarity about the future of monetary policy. But whether they will get the clarity they seek is a different matter.
In Wednesday's statement and the press conference that followed it, Fed Chair Janet Yellen "somehow was able to be more dovish than people expected on one hand, and more hawkish than people expected on another. It certainly lacked clarity," said Jim Iuorio of TJM Institutional Services.
The key tension on Wednesday was between the central bank's projections and its actual policy statement. In the statement, the Fed kept the language that it planned to keep the key federal funds rate target ultralow for "a considerable time after the asset purchase program ends," despite speculation that it would lose the phrase.
However, in the projections released alongside the statement, the Fed's median prediction for the fed funds rate at the end of the 2015 is now 1.375 percent, substantially above the 1.125 percent predicted in the June meeting.
Bonds seemed to take that hawkish-sounding message to heart, as yields rose sharply on Wednesday afternoon. But stocks weren't spooked at all, closing a bit higher on Wednesday and continuing the market's mildly bullish trend.
"The marketplace desperately wants clarity and credibility at this critical stage of policy path implementations," wrote David Robin of Newedge. "What they got was mixed messaging confusion and an accelerated tightening timeline. The Fed cannot have it both ways and expect the marketplace to defer to their judgment."
This week, investors will hear from a host of Fed presidents—William Dudley and Narayana Kocherlakota on Monday, Esther George on Tuesday, Loretta Mester and Charles Evans on Wednesday, and Dennis Lockhart on Thursday.
"I think their job is going to be to make the message a little more clear," said Iuorio, who says the speeches will be key to the markets in the week ahead.