Today is the FOMC announcement day. As expected, the Fed kept the rates unchanged at 5.25% - 5.5%. The March FOMC statement is identical to the January one except one sentence that went from “Job gains have moderated since early last year but remain strong” to “Job gains have remained strong”. Basically, no change.
For the March meeting, the FOMC also published the economic projections from individual members and the “dotplots”. The dotplots for the fed fund rate projection is shown above. In summary, all but one FOMC member predict there will be less than 3 rate cuts this year. Compared to the December 2023 projection, the rate cut expectation has been dampened. Projections for GDP growth and inflation are also adjusted up. The current consensus is that there will be rate cuts this year despite the hot economy and 2+% inflation. I honestly don’t know why the Fed wants to take the risk to cut rates when inflation is still stubbornly high. But it’s possible they end up not cutting at all if the core CPE for next few months turns out too hot.