What are analysts saying ahead of the Fed later?

The rate decision for today is very much a given. But what else is there to look out for? Let’s dive straight into it.

BofA

– Dot plots: 3.9% for 2025, 3.4% for 2026, 3.4% for 2027, 3.3% for longer run- “Markets could interpret the Fed’s message as hawkish because they are focused on
downside risks to activity. But in our view, the “Powell put” is not forthcoming.”- “Powell is likely to keep his cards close to his chest, stating that monetary policy is well
positioned to deal with risks in either direction…will probably argue that the Fed will wait for a clear signal
from the hard data, instead of responding to potentially noisy soft data, before making its next move.”- No rate cuts expected for 2025, 2026

Citi

– Dot plots: 3.6% for 2025- “Fed officials have been reluctant to cut policy rates further – and will not do so at
this week’s meeting – in part due to concerns about upside risks to inflation. If data on inflation and inflation
expectations are in line with our economists’ expectations, the Fed should be well positioned to cut rates
again in May to support growth.”- 125 bps of rate cuts this year with the first one being in May

Goldman Sachs

– Dot plots: 3.9% for 2025, 3.4% for 2026, 3.1% for 2027, 3.1% for longer run- Fed to reaffirm that it is not in a hurry to cut rates amid ongoing uncertainty and likelihood of higher inflation- “Some participants will
likely acknowledge this reality by writing down fewer cuts this year than they did previously.”- 50 bps of rate cuts this year, 25 bps rate cut in 2026

JP Morgan

– Dot plots: 3.9% for 2025- Fed to reiterate that it is not in a hurry to cut rates- Growth forecasts to be revised lower with inflation and unemployment slightly higher for 2025- Statement will acknowledge “moderating growth but stay away from discussing trade-related risks to the outlook”- “Chair Powell likely gave a preview of the themes
that will come up in the press conference. Namely, that they are not prejudging the outcome of trade
deliberations and they don’t need to be in a hurry to respond to these developments.”

Wells Fargo

– Dot plots: 3.9% for 2025, 3.4% for 2026, 3.1% for 2027, 3.0% for longer run- Fed not likely to shift away from “wait-and-see mode”- Macro forecasts to show softer growth in 2025 with higher inflation- “We would not be surprised if Chair Powell makes a dovish comment or two in light of
recent policy uncertainty that has led to financial market volatility.”- 75 bps of rate cuts this year, on hold in 2026

This article was written by Justin Low at www.forexlive.com.