Fed meeting seen as a 'straightforward hold'…limited scope for surprises

JH Kim

Summary

Market participants said they expect the Fed to hold the benchmark rate in the 3.5–3.75% range.
They noted that the dot plot will not be released at this Fed meeting, which is seen as an effort to maintain policy flexibility.
Markets said they are watching the possibility that Governors Christopher Waller and Michelle Bowman could voice a minority view in favor of rate cuts.

A view has emerged that next week’s Federal Reserve meeting is likely to conclude without major changes.

According to Walter Bloomberg, a breaking-news economics account, market participants expect the Fed to hold its benchmark rate at the current 3.5–3.75% range and see limited scope for a surprise at this meeting.

The dot plot is also not scheduled to be released, which is interpreted as an effort by the Fed to preserve policy flexibility ahead of the March meeting.

The key question is whether any Fed governors will dissent. Markets are watching for the possibility that Governor Christopher Waller or Governor Michelle Bowman could voice a minority view in favor of rate cuts. In Waller’s case in particular, some also speculate he could send a dovish signal amid President Donald Trump’s pressure for rate cuts.

Overall, this Fed meeting is expected to have more of a “wait-and-see” character aimed at setting up the next steps rather than signaling a shift in policy direction.