In Intermeeting Period, FOMC Participants See No Rush To Cut Rates (1/2)

In the intermeeting period (March 21 – April 19), several FOMC participants noted that while cutting rates by some magnitude this year was still their baseline, the evident strength in job growth and economic activity meant that there is no rush to initiate rate cuts given higher inflation readings. More details in our full FedSpeak PDF.

• Chair Powell summed up FOMC sentiment by saying that “the recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence”.
• A few FOMC participants revealed their March meeting Fed funds rate “dot” submissions for 2024 (which, recall, revealed a median of 75bp of cuts expected for the year), but above-expected employment (Apr 5) and CPI (Apr 10) reports caused most if not all to reconsider their outlook.
• Goolsbee, Mester and Daly said prior to April's CPI and payrolls releases that 3 cuts were their baseline; all cited the need for a more patient outlook after the data, though without an explicit updated rate forecast.
• Bostic eyes 1 cut (both prior to and after April's key data), while Kashkari saw 2 rate cuts before the data though noted post-CPI the need to "wait and see and be patient".
• At least five members entertained the idea of potential rate hikes to varying degrees.
• NY Fed's Williams noted just before the pre-FOMC blackout period that while it wasn't his "baseline expectation now", the Fed could need to hike if "the data were telling us that". Bowman, Collins, Goolsbee, and Bostic made similar comments in the inter-meeting period.