Fed's March Dot Plot and 50bps Hike Odds

Watching the market's pricing of the March FOMC. Right now, there's still a significant contingent betting on a 50bps hike, but I'm leaning heavily towards a 25bps move. The recent CPI print, while still elevated, didn't come in at the top end of the more pessimistic forecasts, and some of the core components are showing signs of cooling, albeit slowly. Furthermore, the Fed has been quite consistent in their signaling, emphasizing data dependency but also the need for measured steps to avoid an overtightening. I'd put the probability of a 25bps hike at about 70%, with a 50bps move around 25%, and the remaining 5% for no hike or something unexpected. The key will be the updated dot plot – if we see a substantial shift towards more hikes across the board, that could bring 50bps back into sharper focus for subsequent meetings, but for March, the hurdle for an accelerated move feels high. My eyes are also on any commentary around balance sheet reduction; that's another lever they can pull if inflation proves stickier than anticipated, without necessarily needing to shock with a larger rate increase.