Barclays on the FOMC coming up this week - 'risks are skewed toward a dovish surprise'

Author: Eamonn Sheridan | Category: Central Banks

A preview of the Fed this week from Barclays weekly rate outlook

This in (very) brief:

Recent Fedspeak suggests that the Fed is likely to pare back its economic projections and the path of the hiking cycle at the upcoming meeting
  • We believe the risks are skewed toward a dovish surprise
  • Fed may mark growth down by a tenth or so
  • unemployment rate … Fed may mark this up by a tenth or so
  • Fed is likely to leave its inflation forecasts unchanged
  • should translate into a reassessment lower of the path of policy
  • the median path of the funds rate may show only one hike over the forecast horizon, with the terminal rate at 2.5-2.75% and a neutral rate of 2.5%. 
Fed also expected to outline the path of the balance sheet
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Note that this meeting sees the Federal Reserve scheduled to release its updated summary of projections. Expectations are the bank will set out its path for ending the balance sheet runoff.
  • 1800GMT on Wednesday, March 20
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