At this month's decision, the Fed will also release the SEP (Summary of Economic Projections). The new forecasts are expected to show downward revision for growth and upward revision for inflation. Unemployment will likely remain unchanged or revised upward slightly. The focus will be on the dot plot where two rate cuts in 2025 are expected to remain the base case.
The attention will then turn towards the Press Conference. Fed Chair Powell will likely reaffirm their neutral stance as they gather more information on the impact of government policies and the economic developments. He will likely stress that given the uncertainty, they should proceed carefully and that they are in good position to wait.
Overall, the recent economic data has been supportive for the two rate cuts in 2025 that the Fed indicated back in December 2024 but with so many things happening this year, they've been lacking conviction. In fact, there are also high chances that the rate cuts not only would provide support for growth, but would also increase the probability that inflation would reaccelerate and they fear making that mistake.
To sum up, today's announcement has more probabilities of being a non-event rather than a game-changing development and there are very few factors that could trigger a notable change in expectations (like the dot plot). Nonetheless, it's always the most important event in financial markets and can offer great trading opportunities when things deviate from the underlying expectations.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( What is expected for the FOMC decision? )
Also on site :