What's Expected In Today's Decision: Dot Plot And Econ Projections (1/2)

Overall the FOMC decision and communications released at 1400ET/1900UK are expected by consensus to deliver a "hawkish hold". Consensus expectations, and potential surprises, are as follows:

• Rate decision: No change (hold at 5.00-5.25%). While that was consensus prior to Tuesday, the largely in-line CPI reading still leaves 2 of the 33 analysts previews we've reviewed expecting a 25bp hike (Citi and TD).
• No change to balance sheet policy or administered rates (eg overnight reverse repo facility).
• Dot Plot: 2023 median 5.4% (up from 5.1% prior), 2024 4.4% (up from 4.3%), 2025 3.1% (unch), Longer-Run 2.5% (unch). If 2023 is unch at 5.1% that's very dovish, anything above 5.4% is hawkish. 2024 onward are less important.
• In terms of distribution: 7 or more dots above 5.375% for 2023 could deliver a hawkish reaction as it would imply that the Committee is closer than expected to favoring 2 more hikes this year. 11 or fewer dots above 5.1% is probably dovish since it implies a huge dovish contingent on the committee.
• Economic projections: Main areas to watch are: 2023 unemployment rate expected lowered to 4.0-4.2% (from 4.5%); 2023 GDP up a few tenths of a percent from 0.6%; 2023 core PCE might rise slightly from 3.6%.