BNY strategists expect the Federal Reserve to adopt a slightly hawkish stance at this week’s FOMC meeting under new Chair Kevin Warsh.
The Federal Reserve is expected to make slight hawkish adjustments to its statement and dot plot during this week’s FOMC meeting, according to strategists. The median dot may remove the projected 2026 rate cut while signaling two-way risks to rates, reflecting an improved outlook post-ceasefire but no immediate cuts or hikes for 2024.
The meeting marks the first under new Fed Chair Kevin Warsh, who has been critical of forward guidance. Analysts anticipate changes in communication policy, potentially limiting or restructuring the press conference. The U.S.-Iran memorandum of understanding adds a new geopolitical consideration alongside monetary policy decisions.
No rate cuts or hikes are expected this year despite the improved economic outlook, as the Fed balances risks under Warsh’s leadership.