Fed raises GDP, inflation outlook, while maintaining rate cut forecast

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Fed raises GDP, inflation outlook, while maintaining rate cut forecast
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The Federal Open Market Committee’s March projections for rate cuts shows a median Federal funds rate of 4.6% in 2024.

for rate cuts, or the"dot plot," shows a median Federal funds rate of 4.6% in 2024. With the current fed funds rate in a range of 5.25% to 5.50%, the dot plot implies three cuts of 0.25 percentage point.

"The FOMC's SEP continues to show of rate cuts this year, even as the core-PCE estimate was increased by 0.2 pp to 2.6%. We'll argue this is the most relevant takeaway from the SEP because it suggests the upside seen in realized inflation early this year is being dismissed by monetary policymakers," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.

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