FOMC rate decision is a major focus today. Fed is widely expected to keep interest rate unchanged at 1.50-1.75%. The accompanying statement will, at most, contain only minor changes from December’s. There will be no update on economic projections and median dot plot at the meeting. Fed Chair Jerome Powell would reiterate that monetary policy is at the right place. Overall, the decision and press conference is more likely a non-event than not.
Currently, fed fund futures are indeed pricing in 87.3% chance of no change for today, and 12.7% chance of a hike to 1.75-2.00%. For June meeting, markets are pricing in 74.1% chance of federal funds rate being at 1.50-1.7% or above.
