The Federal Reserve is expected to keep interest rates steady at its upcoming policy meeting, based on recent statements from Fed officials, analyst predictions, and market expectations. However, what remains uncertain is the Fed’s plan for the rest of the year.
The June meeting will include a “dot plot” which outlines central bankers’ projections for potential rate cuts in the coming months and years. Analysts like Michael Feroli from JPMorgan anticipate two rate cuts this year, compared to three projected in March.
Following recent data showing a strong economy, the sentiment around interest rate policy has become more cautious. The big question now is how many rate cuts Fed officials will predict. Hawks are expected to forecast minimal cuts, while doves may project two.
While some Fed officials have hinted at possible rate hikes, Feroli believes it is unlikely. Fed Chair Jerome Powell, known for his dovish stance, is expected to focus on the bigger picture of decreasing inflation and a balanced labor market amidst solid economic growth.