MNI Fed Preview - Mar 2024: Countdown To Confidence

EXECUTIVE SUMMARY:

• The FOMC will hold rates at the presumed peak of 5.25-5.50% at its March 19-20 meeting, while reiterating its cut-leaning forward guidance. Incoming data provides the FOMC with both the justification and the flexibility to be patient before making the first cut.
• It’s unlikely the signal provided by the Dot Plot / economic projections will be much different to the last edition in December, while the Statement will be little changed after January’s overhaul.
• It would only take two participants getting slightly more hawkish on 2024 rate prospects to move the median dot from 3 cuts to 2. While a close call, we think the median will stay unchanged, leaving focus on Chair Powell's Q&A and how recent above-expected inflation data squares with his stated requirement of "a little more" evidence before having the confidence to initiate rate cuts.
• The FOMC is also expected to discuss plans to slow the pace of quantitative tightening later this year, though we will probably have to wait for the meeting minutes for details on the Committee’s current thinking.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:

FedPrevMar2024.pdf