the Fed is unlikely to get clarity on these questions until later this year, or even into next year. Accordingly, the July FOMC may be premature for the Fed to officially signal any taper timeline, or indeed what the configuration of the scaling-back of asset purchases will look like, especially since there are no new dots or projection materials due today.

Therefore, traders will be listening to the tone of the Fed statement and subsequent press conference from Chair Powell on whether new variants of the coronavirus are at a stage where Fed officials are concerned enough to push out normalizing policy. The Fed will likely  continue to frame the recent upside in inflation as transitory, but any suggestion that it could be something more persistent would likely be a trading event.

With that in mind, earlier today we laid out one take why despite nobody expecting a "clear catalyst" from today's FOMC meeting, the extremely flat curve means that the bias going into 2pm's Fed announcement is for steepening: a modestly hawkish view.