Fed's March Dot Plot - My Take on a Shift

Considering the recent economic data, particularly the continued stickiness in core inflation and the resilient labor market numbers (NFP holding up better than many anticipated), I'm leaning towards the Fed's March dot plot showing a slightly higher terminal rate expectation than what was projected in December. While the market's been pricing in a faster rate of cuts for later this year, the actual data just isn't supporting that aggressive dovish pivot yet. I'd put the odds at about 65% that we'll see at least one or two more FOMC members shift their projected federal funds rate dot higher for year-end 2024, pushing the median up by 25bps, or at the very least, creating a more dispersed and hawkish-leaning distribution. This isn't to say they will hike aggressively, but rather that their internal projections will acknowledge the current inflationary pressures more directly. This could induce some renewed volatility across the board, affecting everything from $ZARUSD to crypto assets like $MATIC, as the 'higher for longer' narrative gets a renewed lease on life.