Fed Meeting to Show Outlook for Fewer 2023 Rate Cuts, Stoking Concerns of Prolonged Tight Policy Hitting Stocks
-
The Fed is widely expected to keep interest rates unchanged at its meeting, but investors will focus on the "dot plots" showing future rate projections.
-
Dot plots have been scaled back from projections last December of multiple 2023 rate cuts. Tighter policy could persist longer amid sticky inflation.
-
Even small forecast downgrades in the dot plots could shift expectations toward fewer 2023 rate cuts.
-
Sticky inflation and rates near 5% could make bonds more attractive than stocks with paltry dividends.
-
Delayed rate cuts later in 2023 are possible if strong economic data persists, worrying stock investors.