The next big catalyst for the market will be what the Fed says about its balance sheet this week

The market has reason to believe that the Fed will stop raising interest rates for a while. What the central bank will do with less than $ 4 trillion of remaining bonds on its balance sheet is less certain.

"The minutes of the two previous meetings – November and December – included important parts of the balance sheet," said Lewis Alexander, chief economist at Nomura, in a note. "We believe that the corresponding section of the January Minutes will confirm the Committee's intentions to end the normalization of its balance sheet by the end of 2019".

Several Fed officials have mentioned the end of the year as a likely point for the end of the process, but even this is still evolving.

Up to now, the key to the discussions is the level of reserves that the banking sector feels comfortable with. The lower balance sheet corresponds to a lower level of reserves. At present, banks hold about $ 1.64 trillion in reserves, nearly $ 1.5 trillion more than the required level.

Many Fed observers believe that the final level will reach a little over $ 1 trillion, although some see it higher.

"Once we reach $ 1.1 [trillion] Standardization is done, "writes Jabaz Mathai, head of US interest rate strategy at Citigroup.