Fed Likely to Hold Rates Steady But Signal Fewer 2024 Cuts Amid Sticky Inflation
• Fed expected to leave interest rates unchanged at March meeting, but dot plots will give clues about potential rate cuts later in 2024
• Bond market has lowered expectations for rate cuts this year from 6 to 3, with cuts possibly starting in June
• Progress on lowering inflation has stalled recently, so dot plots may shift from 3 cuts to just 2 for 2024
• Watch for any change to Fed's longer-run interest rate forecast above current 2.5%, which could limit future cut scope
• Fed looking to wind down balance sheet reductions (quantitative tightening), reinforcing tilt to lower rates