Federal Reserve Preview: Key focus on interest rate forecast “dots” – JP Morgan

Analysts at JP Morgan offer a sneak peek at what to expect from Wednesday’s US Federal Reserve's (Fed) monetary policy announcement, which is due at 1800GMT.

Key quotes

“The main event ... should be the interest rate forecast "dots." While it's a close call, we think the median dot for 2023 will show one hike, up from no hikes in the last projection from December. This will likely be accompanied by a material upward revision to the growth outlook, and a much smaller upward revision to the inflation outlook. “

“The statement should be revised to reflect the better employment and spending news since late January, but we believe it will retain its overall cautious posture toward the outlook.” 

“We don't expect any news, in either the statement or Powell's prepared remarks, about the path toward tapering.” 

“We don't expect a technical adjustment to the interest on excess reserve (IOER) rate.” 

“We wouldn't rule out learning anything about the supplementary leverage ratio (SLR)... we think it's much more likely that any announcement is made on a non-FOMC day.”