Powell's Fed Could Clear Up Mysteries Puzzling Investors

3. Any guidance?

Forward guidance's days are limited, according to Fed minutes and officials including Powell. As the Fed scraps the practice of pledging lower-for-longer rates, two statement sentences are in the cross-hairs. One says the "federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run," and the other explains that "the stance of monetary policy remains accommodative."

The immediate query is whether those phrases will be dropped in June, a sign that a decade of market hand-holding is coming to an end. Cutting the first sentence would also be "opening the door for policy to turn restrictive over time if warranted," economists at Barclays wrote in a note previewing the meeting.

Forward guidance is also part of a broader question: how will Fed communication shape up under Powell? In March, he indicated that he's still considering the possibility of a press conference at every meeting instead of the current quarterly approach, and that topic could come up again.

4. Pushing limits?

Fed balance sheet runoff is playing out in the background, as promised, but it has begun to sneak into the foreground.

The effective fed funds rate has been pushing toward the top of its range, which for years has been the level of interest on excess reserves, or IOER. As a result, the Fed has signaled that it is thinking about setting the IOER five basis points below the top of the target range.

Upward pressure on the effective funds rate could come from technical factors, but there's a chance that it's a sign bank reserves are becoming scarce. If Fed officials think that's possible, it may prompt them to discuss how small the balance sheet should become over time and how they will manage the funds rate in the future.

"We believe nascent signs of reserve scarcity are contributing to the move," Mark Cabana, a Bank of America rates strategist, wrote in a recent note. "The Fed is now near a crossroads for making a decision on its longer-run monetary policy framework."

5. Emerging markets versus the Fed?

Fed officials have been unfailingly chill about global developments in recent months.

Powell dismissed the role of U.S. monetary policy on foreign financial conditions as "often exaggerated," speaking in early May. Brainard mentioned emerging markets in her recent speech, but placed more emphasis on upside risks posed by U.S. fiscal stimulus.

"They're more focused on the domestic economy," said Kevin Cummins, an economist at Natwest Markets Securities Inc. in Stamford, Connecticut.

Yet as emerging markets suffer a rout, central bankers in India and Indonesia have called for Fed restraint. Against that backdrop, Powell is sure to field some globally-conscious questions. Any signs of nervousness could be a dovish signal.