Janet Yellen takes center stage in the week ahead, chairing her first FOMC meeting amid market skittishness over events in Ukraine.
There is little doubt the Fed will continue to move forward and announce another $10 billion "taper" of its bond-buying program, taking it to $55 billion a month. The Fed is widely expected to take a knife to some of the language in its statement that set an unemployment rate of 6.5 percent as a level to cut rates.
"This is all about her. It's her first meeting. It just doesn't seem like the meeting where there's going to be a lot of policy fireworks given it might be prudent to let things coast through again, while they all get on the same page," said George Goncalves, Treasury strategist at Nomura Americas.
The Fed's target of 6.5 percent for unemployment is seen by the markets as outdated and confusing, since unemployment is now at 6.7 percent. Fed officials have also called it obsolete. The Fed will also release new economic forecasts, and any talk about the economy is likely to suggest that the weather may be a major factor behind recent weak data.
Goncalves does not expect the Fed to make moves based on Ukraine, unless markets deteriorate rapidly. "The Fed's in a tough predicament because they can't seem like they're reaciting. They demonstrated once before when we had the fallout in January, they were unwaivering. They did the taper," he said.
While stocks sold off in the past week, buyers sought safety in bonds, sending the 10-year yield to 2.65 percent. The Dow was down 2.4 percent to 16,065 and the S&P was off nearly 2 percent to 1,841, in the worst weekly performance since January.
The Fed's success at altering its forward guidance will ultimately show up in the yield curve, Goncalves said.
"The flattening of the curve could be the risk next week. 10s (10-year notes) and 30s (30-year bonds) maybe can go up a little bit in rates, but fives (5-year notes) can go up more if they don't seem like they made more progress on the forward guidance," he said.
The two-day Fed meeting ends Wednesday with a presser by Yellen, also her first.
Markets are expected to remain on edge going into the coming week, after Sunday's referendum in Crimea on whether to join Russia or stay with Ukraine. Tense talks between the U.S. and Russia ended Friday with no clear resolution on whether Russia would recognize the vote and the West would impose sanctions. "I think anxieties are going to be running high. The Crimea vote is a foregone conclusion, but how does the West respond? How does Russia respond?" said Marc Chandler, chief Treasury strategist at Brown Brothers Harriman.
On the data front, there is industrial production Monday, CPI on Tuesday, and home sales data and weekly jobless claims Thursday. There are a few earnings, including Nike on Thursday and Tiffany on Friday.
Earnings: JA Solar
8:30 a.m.: Empire State survey
9:00 a.m.: TIC data
9:15 a.m.: Industrial production
10:00 a.m.: NAHB survey
Earnings: FedEx, Guess, HermanMiller, KB Home, General Mills
7:00 a.m.: Mortgage applications
8:30 a.m.: Current account
10:30 a.m.: EIA oil inventories
2:00 p.m.: FOMC statement and projections
2:30 p.m.: Fed Chair Janet Yellen press briefing
Earnings: Nike, Scholastic, Lennar, Silver Wheaton
8:30 a.m.: Initial claims
10:00 a.m.: Existing homes
10:00 a.m.: Philadelphia Fed survey
10:00 a.m.: Leading indicators
10:30 a.m.: EIA natural gas
Earnings: Darden Restaurants, Tiffany
11:45 a.m.: St. Louis Fed President James Bullard
1:45 p.m.: Dallas Fed President Richard Fisher
4:30 p.m.: Minneapolis Fed President Narayana Kocherlakota
6:30 p.m.: Fed Gov. Jerome Stein