Fed dot plots to suggest one more hike - TDS

According to analysts at TD Securities, markets focus today will be on the FOMC March meeting and they anticipate that the dot plot to suggest one more hike (to neutral) this year, and potentially no additional hikes in 2020 based on recent comments from several Fed officials.

Key Quotes

“We also expect the median dots for 2020 and 2021 to no longer suggest hiking beyond a neutral range. We see this not as a consequence of a shift in the reaction function, but of the lower projected path for core inflation.”

“More clarity about when runoff ends, and the size of the balance sheet at that time, should be forthcoming, if not in a separate statement then as part of Powell's press conference. Look for a neutral market reaction, as outright rate cuts are priced for 2019.”