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The opinions are quite divided on what the Fed might communicate later today. Let’s take a look at what the analysts are saying (h/t @ MNI – Market News).
Barclays
– First 25 bps cut only in September or December
– “Powell to mention that recent data have not given the FOMC greater confidence
about disinflation and that it will likely take longer than expected to achieve that confidence”
Citi
– First 25 bps cut in July
– “We do not expect a further hawkish shift at the May meeting”
– “There is some risk of hawkish headlines if Powell is pressed about hikes but this would simply reflect the logical conclusion that there is some
scenario for inflation where higher rates are needed, and this would be far from the base case”
Deutsche
– First 25 bps cut in December
– Fed to deliver a more hawkish-leaning message
– Statement could see language change to clarify no further progress since March
– Powell to emphasise no urgency in cutting rates given resilient economy
– “We also think he will not actively keep prospects alive for a rate cut in July”
Bank of New York Mellon
– QT tapering to be announced
– “The
statement and the Powell press conference to be more hawkish on rates, given Powell’s recent comments
and the evolution of the data in recent weeks”
Morgan Stanley
– First 25 bps cut in July
– Statement should be little changed but may take a more hawkish tilt
– Powell to point to an expectation of rate cuts “at some point,” but Fed may be
waiting “longer than expected” to cut rates
JP Morgan
– Statement to be little changed
– “If
asked about the possibility of further hikes, we expect Powell to indicate it’s not his base case but also
something he can’t rule out”
Goldman Sachs
– First 25 bps cut in July
– Powell might reiterate his earlier comment that “it will likely take longer than expected
to achieve that greater confidence” needed to cut