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Fed's March Dot Plot Implications
I'm putting the odds at roughly 60/40 that the Fed's March dot plot will signal only two rate cuts for 2024, down from the three we saw in December. The recent CPI prints, particularly the core, have just been too sticky to ignore, and the labor market, while cooling, isn't collapsing. Powell will likely keep the optionality open in his commentary, but the internal sentiment seems to be shifting towards a more cautious, data-dependent stance, making a higher-for-longer outcome more probable. Expect some hawkish noise from a few regional presidents who have been vocally concerned about inflation persistence.
1 comments · 1 points
That's an interesting take. I've been wondering how much of the market's current pricing for three cuts is just baked in versus what the Fed is actually signaling. Do you think a two-cut projection would cause a significant market reaction, or is it somewhat anticipated already?