The Federal Reserve is widely expected to hold two rate cuts later this year as policymakers remain cautious amid uncertainty in President Trump’s economic policy.
“The theme of the meeting will be uncertain and the awarded Chair Powell will probably say it again and again,” said Will Stice, Bond Portfolio Manager at the Wilmington Trust.
Investors will analyse the 2pm release of the Fed’s quarterly forecast. This is also known as the Economic Forecast Overview (SEP) for clues to advance. They do the same thing as what Federal Reserve Chairman Jerome Powell has to say at the press conference after the ET decision at 2:30pm.
Goldman Sachs will dial back its economic growth outlook from 2.1% to 1.8% for the Fed from 2.5% to 2.8% for 2025, and due to the impact of Trump’s tariff rollout, its economic growth outlook from 2.1% to 1.8%.
The latest forecasts include “Dot Plot,” a chart with an updated chart showing each Fed’s forecasts regarding the direction of central bank benchmark interest rates.
Read more: How Fed Rate Decisions will affect your bank account, loans, credit cards and investments
The final dot plot released in December revealed a consensus among Fed officials for two cuts this year.
As Trump is leading these policies to action as president as president, including tariff slates that could expand in April, the question is whether central bank policymakers will adjust their rate outlook.
Matthew Lutzetti, a US economist at Deutsche Bank Securities, believes the median median interest rate cuts in 2025 will remain the same between the two, but says some officials’ forecasts could drift upwards. He also hopes the Fed will announce a suspension with a balance sheet leak that begins in April.
Luzzetti has long thought the Fed would stabilize the full annual fee, but he points out that by “increasing the downside risk to the economy,” central banks could cause lower fees than this year.
“Like the Fed, we hope to get a better sense of details about the policy before we decide whether adjustments are needed,” he said. “But data and financial markets may not allow us (or the Fed) to be so patient.”
The biggest concern for investors is the possibility of scenarios where growth continues to stall, inflation and unemployment. This is a dynamic known as stagflation.
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