The US Federal Reserve’s Federal Open Market Committee is all set to announce its latest policy decisions today on the 19th of March at 2 PM ET. This is the second time the committee is holding a Fed meeting this year since President Trump took over the White House office. Stakeholders are keeping a close eye on whether Jerome Powell will signal any changes in the current rate trajectory. It will also give Important insights into expectations of inflation, growth, and rate cuts in 2025. If you want to know what to expect from the FOMC meeting, this article is for you.
What To Expect In The FOMC Meeting
What Marc Franklin Said Expects From The Meeting?
Marc Franklin who is the Deputy Head of Multi Asset Solutions-Asia at Manulife Investments expects two or even three rate cuts in 2025. Despite the current volatility in the market, he suggests two or three rate cuts from the US Federal Reserve is a reasonable case. He also stated that the investors took long positions in the equities at the beginning of the year. However, the constantly shifting risk sentiments resulted in an outflow of capital and ultimately market turbulence.
Ed Yardeni Warns Economic Fallout
Ed Yardeni who is the President of Yardeni Research has warned about the possible economic fallout and risks the United States is currently facing. He also explained in his statement how ignoring short-term recession concerns for long-term gains can have severe political implications. This is mainly because the voters are currently impatient because of the uncertainty ahead of the midterm elections. Yardani gave his statement after Scott Bessent, the US Treasury Secretary, said there are no guarantees the US can avoid a recession. His warnings about economic fallout have raised the speculations about the policies to be announced today.
What Johanna Chua Thinks Will Happen?
Johanna Chua who is the Head of Emerging Market Economics & Chief Asia Economist at Citi thinks the US Federal Reserve will keep the rates unchanged for now. However, it may also indicate deeper rate cuts this year through its dot plan projections. She suggested in his comment today that the Fed may revise its forecast downward and signal 75 bps in place of the 50 bps expectations. Johanna also explained how a weakening dollar is adding cost-push pressure on inflation. This is making the Fed even more cautious.
Kenneth Rogoff’s Recession Warning
Kenneth Rogoff who is a Harward Economist has also warned about the probability of the US recession climbing up from 30% to 35%. He cited policy uncertainty as well as cuts in government spending as the reason for the recession. He also suggested that the tariffs Trump has imposed on the neighboring countries are also a major reason for the climb in recession. Rogoff explained how the long-term outlook remains strong. However, short-term volatility can actually result in a destabilized market.
What Will Probably Happen Today In The Policy Meeting?
The second US Federal Reserve’s FOMC meeting since Trump stepped into the White House office is scheduled today. The speculations surrounding the meeting are at their peak especially because of the volatility in the market. Both the Producer Price Index and Consumer Price Index suffered a fall in February. Jerome Powell has signaled a cautious approach to cuts in rates. However, according to most of the experts, the rates will probably stay unchanged for now. The press conference scheduled today will provide important insights regarding future policies, especially amid global uncertainty.
