Home » Fed Preview: Forecasts from 15 major banks, risk of a hawkish shift in the dot plot

Fed Preview: Forecasts from 15 major banks, risk of a hawkish shift in the dot plot

by FX BrokerNews

The US Federal Reserve (Fed) is anticipated to maintain its target range for the federal funds rate unchanged at 5.25%-5.50% during its upcoming meeting on Wednesday. The focus will be on various aspects, including the quarterly dot plot, Summary of Economic Projections (SEP), and Fed Chair Jerome Powell’s post-meeting press conference.


ANZ anticipates that the FOMC will leave the target rate for fed funds unchanged, considering the current profile of moderating growth, gently rising unemployment, and gradual inflation return. They acknowledge the possibility of a modest upshift in the dot plot and anticipate discussions on quantitative tightening (QT) to begin, although any specific announcement might be postponed until the May meeting.


Commerzbank expects the Fed to maintain its key interest rates, with the target range for Fed Funds likely to remain at 5.25%-5.50%. They anticipate the dot plot to indicate three rate cuts in 2024, similar to the previous update in December.


Nordea forecasts no changes to the Fed Funds rate or QT at the March meeting. However, they expect revisions to growth and inflation projections for 2024, which could lead to a median FOMC dot plot showing only two rate cuts this year, compared to the three projected in December 2023.

Danske Bank:

Danske Bank does not anticipate any monetary policy changes in the March meeting. They will focus on rate cut timing cues, updated rate and economic projections, and detailed discussions on QT. They expect the Fed to cut rates for the first time in May and gradually phase out QT from September. The GDP forecast for 2024 is expected to be revised higher, but the ‘dots’ are likely to signal three rate cuts for the year.

ABN Amro:

ABN Amro expects the Fed to keep policy unchanged, with the median FOMC member still anticipating three rate cuts this year. They anticipate Chair Powell to maintain a cautiously hawkish tone and discuss the winddown of QT, although it might be too soon to announce a plan at this meeting.


ING believes the next move for the Fed is a cut, most likely in June. They expect similar projections as in December, signaling three 25 bps rate cuts in 2024, with further cuts in 2025. The messaging is likely to indicate a willingness to cut rates later in the year, pending more evidence.


TDS expects the Fed to maintain the Fed funds target range and median projection for three cuts this year. They anticipate preliminary details about QT plans and suggest a risk-reward scenario for USD weakness.


Rabobank expects the first rate cut in June but notes an increased risk of a later start. They project one cut of 25 bps per quarter once initiated, with inflation rebounding in 2025, potentially causing a pause in the cutting cycle.

Deutsche Bank:

Deutsche Bank anticipates minor revisions to the meeting statement and potentially higher core PCE inflation forecasts for 2024. They expect the Fed to keep the fed funds rate at 4.6% or potentially signal 50 bps of cuts based on inflation forecasts.

Wells Fargo:

Wells Fargo does not expect policy changes in this meeting but anticipates a rate cut in June, followed by cuts in subsequent meetings in July, September, and December.

RBC Economics:

RBC Economics expects the Fed to maintain the fed funds range unchanged and suggests monitoring any shifts in the monetary policy statement language.


NBF anticipates no changes to policy rates and notes policymakers’ cautious stance until greater confidence in inflation reaching 2% is attained. They expect the ‘dot plot’ to reflect a potential reduction in expected easing for 2024.


Citi expects largely unchanged projections but anticipates a potential upward revision in core PCE inflation forecasts. They suggest that median dots are likely to remain unchanged, with the FOMC discussing balance sheet reduction in depth.


SocGen expects no policy change in March and suggests that economic indicators in the coming months will determine the feasibility of mid-year rate cuts. They anticipate the new dot plot may be less dovish than December’s projections.


CIBC expects no definitive signals on rate cuts but acknowledges recent inflation data may affect forecasts. They suggest the Fed may maintain projections for three cuts in 2024, with potential adjustments to long-term rate outlooks.

Overall, the consensus among analysts points towards a stance of caution from the Fed, with expectations of maintaining rates unchanged in the upcoming meeting.

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