MNI Fed Preview - March 2024: Analyst Outlook

• Note to readers: This is an update to the MNI Fed preview published on Friday Mar 15. Please see Page 36-41 of this document for sell-side analysts' outlooks for the March FOMC decision and future policy.

EXECUTIVE SUMMARY:

No 2024 Dot Change Expected, But Some Longer-Run Intrigue

Going into the March FOMC meeting, analyst expectations for 2024 Fed rate cuts have converged firmly on June as the starting point, but there remains a wide range of expectations otherwise.

• The “median” analyst whose previews we read for this report saw 75bp of Fed funds rate cuts in 2024 compared with 125bp pre-January meeting. There is no firm consensus though, with a wide range of expectations running from 50bp to 225bp (had been 75bp to 275bp pre-January FOMC).
• The most aggressive rate cut path we have seen is from UBS, whose analysts expect 225bp of cuts in 2024 starting in June, with 150bp more in Q1 2025.
• TD and Danske see cuts starting in May; Nomura sees July while Nordea sees September.
• For the updated Dot Plot, there is firm consensus that there will be no change to the FOMC medians for rates (20 of 24 analysts see 3 cuts, or 4.6%, remaining the base case for 2024).
• Barclays, JPMorgan, Nomura, and Standard Chartered see a rise to a 4.9% 2024 median, while Deutsche, Goldman Sachs, and Nomura see increases further out (2025-26).
• Of 18 analysts who expressed an opinion on the longer-run dot, 6 see an increase from 2.5% in the December Dot Plot.
• Several analysts expect the GDP and inflation forecasts for 2024 to be revised upward slightly. No analyst expects significant changes to the Statement.
• On tapering QT, the general expectation remains that the Fed will cap Treasury runoff at $30B (vs $60B currently) around mid-year, with an announcement in May / June.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:

FedPrevMar2024 - With analysts.pdf