The Fed publishes its economic projections: what to expect for growth, inflation and interest rates?

The Fed is unlikely to change interest rates when it releases its decision today; data does not support a cut. But any changes to policymakers’ interest rate forecasts for the rest of 2024 could be newsworthy. Those changes will be released along with the rate decision as part of the Fed’s Quarterly Economic Projections.

More interesting will be the update of the macro box and, with it, the “dot plot”, that it is not ruled out that it will be tightened to show fewer rate cuts in 2024, only two compared to the three expected in December. Chairman Jerome Powell will then lead a press conference at 2:30 p.m.

At first glance, heToday’s Federal Open Market Committee meeting doesn’t look exciting. The policymaking body is not expected to change interest rates. But that doesn’t mean there won’t be news.

Wall Street: what the market expects

Central bank officials are expected to leave interest rates unchanged. The Fed will also publish its latest Economic Projections, which include officials’ forecasts for economic growth, inflation, unemployment and interest rates. However, all eyes will be on guidance after recent events.

The Federal Reserve has a lot to do at its meeting this week, but ultimately it may not do much in terms of changing the outlook for monetary policy.

As expectations have changed sharply this year for where the Fed is headed, this week’s two-day session of the Federal Open Market Committee will come under close scrutiny for clues about the direction of interest rates. .

However, The general sentiment is that policymakers will stick to their recent messaging, which has emphasized a patient, data-driven approach in no rush to cut rates until there is greater visibility on inflation..

“They will make it clear that they are obviously not ready to cut rates. They need a few more data points to feel confident that inflation is returning to target,” said Mark Zandi, chief economist at Moody’s Analytics.

“I expect them to reaffirm three rate cuts this year, which would suggest the first rate cut would be in June.” Markets have had to adjust to the Fed’s on-the-fly approach, reducing both the timing and frequency of cuts expected this year.

Earlier this year, traders in the fed funds futures market anticipated that the rate cut campaign would begin in March and continue until the FOMC had cut the equivalent of six or seven times in quarter-percentage-point increments. .