The Market Brief
Hey team, rates decision today, where the FOMC is expected to maintain its cautious stance at the March meeting, signaling that it is not in a hurry to cut interest rates.
Here is everything you need to know for the upcoming FOMC meeting!
Impact Snapshot
🟥 Fed Rate Decision - 2:00pm
🟥 FOMC Press Conference - 2:30pm
Macro Viewpoint
US equity futures posted small moves in cautious trade before the Federal Reserve’s policy decision, which is expected to hold interest rates steady but could offer clues on the outlook for the economy and monetary policy through its quarterly dot plot.
The FOMC meeting today will likely reiterate that it is not in a hurry to deliver further interest rate cuts and intends to remain on the sidelines until policy changes under the new administration become less volatile and uncertain, and the outlook becomes clearer.
Here is everything you need to know for the upcoming FOMC:
Fed officials have emphasized that ongoing policy uncertainty under the new administration and a lack of clarity on the economic outlook justify keeping rates unchanged for now.
Two months into the new administration, focus on policy uncertainty has only increased, and worries about the impact of that are playing a part in the sharp derating of U.S. growth that we have seen recently in markets.
With tariffs now a reality, more of the FOMC is likely to incorporate them into the new forecasts, pushing inflation forecasts up and growth forecasts down. A lot will depend on the magnitude of this and the messaging that Chair Powell chooses.
The market reaction is likely to focus on two issues:
How worried the Fed sounds about the growth picture.
How big a constraint the inflation trajectory—including tariff risks—seems to be in postponing easing.
Tariff Impact Raises Inflation and Lowers Growth Outlook:
The increase in tariffs represents a significant shift in the economic landscape, prompting the Fed and market participants to revise their expectations.
Higher tariffs are expected to push inflation higher while dampening economic growth, creating a more complicated policy environment for the Fed.
Develop better context and create a robust entry model by understanding all the market nuances we share on a daily basis. This will help you build the market understanding that most traders lack.