Following their meeting on 30 January, the FOMC added this phrase to its statement: "the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate." This appeared to signal that the Federal Reserve would stay on hold for an extended period. But just a few months later, markets are aggressively pricing in Fed rate cuts.

We think the FOMC meeting on 19 June could mark an important inflection point for Fed policy. Following the meeting, there are three key areas we believe investors should watch:

* FOMC statement: In our view, if the word "patient" is left in the statement, it would be a signal to the markets that a quick rate cut isn't being considered. Knowing that the market is already pricing in cuts, removing "patient" would open the door to a cut as soon as the next meeting on 31 July, although it would still not entail a promise to cut.

* Summary of Economic Projections: Changes to the "dot plot," which indicate the participants' rate expectations for the end of each year (2019, 2020, and 2021), will give us clues about the likelihood of a rate cut. If only one or two dots call for a rate cut in 2019, it would suggest that the consensus remains to stay on hold. Also, cuts to the projections for core PCE inflation, which currently stand right at the Fed's 2% target throughout the forecast period, could signal willingness to lower rates to boost inflation.

* Powell's news conference: This gives Powell an opportunity to send whatever message he wants to the markets. He could help to clear up any ambiguity in the statement and the summary of economic projections, while also providing information on what the Fed would need to see in order to cut rates. Our base case remains that the Fed will stay on hold through the end of 2020. In our view, economic and financial conditions are too strong for the Fed to cut rates, even with inflation running below target. If inflation slows further, or nonfarm payrolls grow by less than 100,000 per month for several months in a row, then rate cuts would become much more likely.