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Busch: 5 Things to Know for the FOMC

With growth returning and unemployment seemingly peaked, will the FOMC have to exit their massive stimulus. Here are 5 things to ponder for today:

1. A Bernanke Fed has never raised rates in an aggressive manner to combat either inflation or bubbles.

2. Wages are the major factor influencing prices in the United States and Bernanke believes we remain well below levels that will create pressure.

3. Gold and other commodities indicate inflation is a looming problem.

4. Fiscal policy is on a path to a crisis with total debt in the United States growing almost 20% in one year. Congress continues to spend like a drunken sailor with each agency receiving a 10% increase for 2010 when the deficits are exploding. The Fed will be forced to react when the crisis comes to protect the US dollar and to ensure bond holders it is the guardian of the value of the currency.

5. Bernanke is up for a vote on whether he gets to keep his job.

If you think this makes the FOMC's job difficult, consider that the American public has a very low opinion of the central bank due to 10% unemployment and the belief that the Fed bailed out Wall Street over Main Street.

Time magazine aside, there are plenty of folks out there that question whether Bernanke should keep his job including Ron Paul and Jim Bunning. For today, the markets are not expecting a move to change rates. The market is sniffing out whether the Fed will pull back sooner on their QE rather than wait until March 2010. The market is also sniffing out whether the Fed will indicate any change in "extended period of time" for the current easing.

By now, you should be aware of the 12 and 20 months the Fed waited after unemployment peaked during the last 2 recessions before they began raising rates. Like I said yesterday on CNBC's Closing Bell, the clock is ticking for the Fed after we dropped to 10% unemployment from 10.2%. We're all awaiting to see if Bernanke and Co. have the backbone to raise rates to fight inflation when growth remains sluggish in 2010.

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Andrew B. Busch is Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.