The Federal Open Market Committee (FOMC) meeting today is not expected to result in a change in interest rates. However, the focus will be on the dot plot of economic forecasts and Fed Chair Jerome Powell's press conference for clues about the central bank's timeline for cutting rates. Despite recent strong economic and labor-market data, there is no support for lowering interest rates at this meeting. Powell is expected to maintain a data-dependent stance without giving a clear answer on future plans.
Investors and economists will be looking for any changes in the policymakers' median estimate for rate cuts in 2024, as well as any adjustments to other forecasts in the Summary of Economic Projections (SEP). The December SEP projected a soft-landing scenario with lower inflation and gradual rate cuts. Powell is anticipated to stick to a wait-and-see approach in his press conference, allowing for flexibility in decision-making. There might also be discussions on the pace of reductions to the Fed's balance sheet. The Fed will publish its interest rate decision and SEP at 2 p.m., followed by Powell's press conference at 2:30 p.m.