A lot – and we mean a lot – has happened since the last FOMC meeting (Jan 28th).
Oil is up 54% since the last FOMC meeting, bitcoin has tumbled. Gold and stocks are also down notably while the dollar has strengthened…
Both growth and inflation data have outperformed since the last FOMC meeting (but as the chart shows, fears are rising over stagflation as the impact of higher energy prices – and tighter financial conditions – could weigh on growth)…
Rate-cut expectations for 2026 have collapsed since the last FOMC meeting (most notably since the war began) with less than one full cut now priced in…
The market is priced for absolutely nothing to happen today (from a rate change perspective – higher or lower), so all eyes will be on the number of dissents, the new set of SEP (dots) data, and any commentary on the economy and/or the impact of the war.
Expectations are for a continuation of a “hawkish hold” amid heightened uncertainty.
FOMC Statement
Rates remain on hold with one dissent
Fed statement comparison: exactly as expected.
-
Very little changes, small downgrade to labor market (“some signs of stabilization” to “little changed in recent months”),
-
…and brief discussion or Iran war (“implications of developments in the Middle East for the U.S. economy are uncertain”)
Dots: Statement of Economic Projections
- *FED MAINTAINS PROJECTIONS FOR ONE RATE CUT IN 2026, ONE IN 2027
The new dots show 7 Fed members preferring to hold for the rest of the year with 12 preferring at least 1 more cut…
Now all eyes turn to Powell to see how ‘hawkish’ this hold is?
