The Federal Reserve will update its expectations on Wednesday. What do you expect

Federal reserve officials are expected to maintain this week’s meeting on fixed interest rates, but they settled their views on the economy and perhaps the future track of interest rates.

If pricing on the market is correct, there is no opportunity in the bank’s central policy makers from the current level of the main interest rate, targeted in a range ranging between 4.25 % -4.5 %. chair Jerome Powell In recent weeks, his colleagues have called for the patient’s approach, who do not need to be in a hurry to do anything.

However, they are also expected to drop evidence about the place where things go from here against the uninterrupted background President Donald TrumpCommerce and Financial Policies. This can include any of the amendments to inflation and economic growth expectations to the number of times, if any, at all, they reduce interest rates.

“There is no opportunity to reduce on Wednesday, so all other things become more important,” said Dan North, senior economists in Allianz in North America. “They will mainly say,” You know what, we are not in haste now. “

In fact, this was the prevailing message from Powell and his colleagues in the Federal Open Market Committee. in Speaking earlier this month For the economists in New York, Powell insisted on “there is no need to be in a hurry” where central bankers are searching for “greater clarity” about the location of Trump’s head.

New expectations of gross domestic product, inflation and unemployment

After that, the public will be left to wander through the updates offered by the Federal Reserve for its quarterly expectations for interest rates, gross domestic product, unemployment and inflation. Based on modern data, the Federal Reserve can raise inflation expectations for the year 2025 (in December, expectations were 2.5 % in both the foundation and the title) with a reduction in GDP projection (from 2.1 %). Powell will host his usual press conference after the investigation.

Regarding the price question, the Federal Open Market Committee will use the DOT plot for individual members ’intentions.

There is a major dispute over what can happen there. The committee can maintain its expectations in December for two lowering, removing one or both, or unexpectedly, adding another anxiety about a possible slowdown. Everything appears to be on the table.

“I think it may be one or zero discounts this year, especially if the definitions are committed,” North said. “I do not think they will try to save the economy by lowering prices, because they know that if they inflation, they will have to return and start again.”

Economists are concerned Trump’s tariff It can refer to inflation, especially if the president becomes more aggressive after the White House launched a global review of the tariff on April 2. If the Federal Reserve is more anxious about the inflation feed by the customs tariff, it may turn into a more frequency in reducing it.

Thierry Wizmann, FX Global FX and FX in Macquarie, said investors are concerned about the direction indicated by FOMC.

Wizmann wrote: “This concern is with suspicion that the federal reserve is no longer responsible,” after it permeated the control of the Trump administration’s macroeconomic policy. “Given the current insecurity, and the recent increase in inflation expectations, the Federal Reserve may find it difficult to indicate three other price cuts, or even two others. It can pay one rate to 2026, leaving only one cut in the intermediate “point” for 2025. “

Markets still see discounts or three

“If the Federal Reserve decides to adhere to two reductions, it is likely to be” to avoid adding to the last market disturbance, “David Merikli, Economist in Goldman Sachs, said in a note.

Main stock market averages Hover around the correction Lands, or 10 % decrease in heights.

In the past, below The idea of ​​”Federal Reserve”, The markets are expecting the central bank to reduce the policy in response to the disturbances in the market. Traders do not expect a preliminary reduction of the rate until June at least, and they seek to facilitate one additional percentage and about 50-50 chances for a third step by the end of the year, according to the CME’s Group Fedwatch Federal Reserve Future Reserve Scale.

Wizmann said this may be very ambitious.

“In fact, the markets seem to have received very benign, and instead of referring to its confidence in its outlook, the Federal Reserve may issue no confidence signals, instead. In other words, the FOMC meeting may leave many questions without leave, as well as the press conference that Jay Powell did,” using NNEWAMAM’s.

The committee can also address the “quantitative tightening” program, as it allows a specific level of revenue from maturity to implement the public budget every month. Markets are widely expected that the Federal Reserve will finish the program later this year, and recent meetings have offered a discussion on the best way to deal with the 6.4 trillion dollar central bank portfolio of the treasury and securities -backed by mortgage.