{"id":82537,"date":"2018-06-13T22:00:47","date_gmt":"2018-06-13T22:00:47","guid":{"rendered":"http:\/\/www.bnreport.com\/fed-decision-day-guide-one-or-two-more-hikes-in-2018\/"},"modified":"2018-06-13T22:00:47","modified_gmt":"2018-06-13T22:00:47","slug":"fed-decision-day-guide-one-or-two-more-hikes-in-2018","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/fed-decision-day-guide-one-or-two-more-hikes-in-2018\/","title":{"rendered":"Fed decision-day guide: One or two more hikes in 2018?"},"content":{"rendered":"

By Steve Matthews<\/strong><\/p>\n

Federal Reserve<\/a> Chairman Jerome Powell<\/a> has repeatedly played down the central banks \u201cdot plot\u201d as a guide to future interest rates<\/a>, but Wall Street just wont take the hint. <\/p>\n

While the Federal Open Market Committee<\/a> is almost certain to raise rates a quarter point at the close of a two-day meeting Wednesday, investors are focused on whether the panel will signal one or two additional 2018 hikes when it releases updated interest-rate forecasts with the policy decision at 2 pm Powell will begin his press conference 30 minutes later. <\/p>\n

The FOMC was about evenly split in March when it projected three hikes this year, so just one participant switching to four hikes could shift the median of the committee. Accelerating growth and inflation rising to target might argue for a more aggressive tightening, while lackluster wage increases and fragile emerging markets would suggest caution. <\/p>\n

\u201cThe market will be focused on 2018 dots,\u201d said Michael Feroli, chief US economist at JPMorgan Chase<\/a> & Co. \u201cIt is a close call. Im leaning toward four but without much conviction. The FOMC is really focused on the language but I think that will be overshadowed by the dots.\u201d <\/p>\n

Powell advised investors in his March press conference not to focus too much on the dots. Asked about its projections for 2020, he said policy makers \u201cdont have the ability to see that far into the future.\u201d That echoed his 2016 view when he pointed to \u201cshortcomings\u201d in the dot-plot. <\/p>\n

Economists surveyed by Bloomberg predict the FOMC will stick with its March prediction of three hikes this year in the updated quarterly forecasts. <\/p>\n

Even so, \u201cthere is a risk that the dots go up a tad, not down,\u201d said Steven Ricchiuto, chief US economist at Mizuho Securities. \u201cAll you need is for one to change. There has been enough strength in the economy\u201d to tilt to more tightening. <\/p>\n

\"inflation\"<\/figure>\n

The Summary of Economic Projections could see other changes that reflect mostly upbeat economic data since March. Forecasts could show higher 2018 growth, lower unemployment rates and possibly slightly higher inflation, said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. <\/p>\n

The committee will also debate the language in its policy statement. Minutes to the last two FOMC meetings showed officials have begun to discuss changes reflecting that policy is moving closer to neutral rather than still being characterized as \u201caccommodative.\u201d <\/p>\n

\u201cId expect this part of the statement to be softened to something like somewhat accommodative or perhaps even dropped,\u201d said Jonathan Wright, an economics professor at Johns Hopkins University<\/a> in Baltimore and a former Fed economist. <\/p>\n

In the press conference, journalists are likely to ask Powell about softening global growth and emerging markets struggling with higher US rates. Currencies of such nations have been hammered in a spreading selloff amid worries that their economies wont cope with higher US borrowing costs. <\/p>\n

What Our Economists Say<\/strong>
The Fed is due to hike interest rates for the seventh time of the cycle at the June meeting. This is broadly anticipated by market participants, so execution should be relatively smooth and uneventful. Any market reaction is more likely to be related to changed expectations for future policy as officials are due to update their economic and financial forecasts. The Fed has been resolute in terms of not overreacting to evidence of rising inflation and mounting labor scarcity, and this is likely to be expressed in its forecast updates, as well.\u2013 Carl Riccadonna and Niraj Shah, Bloomberg Economics. <\/p>\n

\u201cThe tone of the press conference will be important,\u201d and Powell will likely strike a balance, \u201cnot eager to raise faster or slower,\u201d said Roberto Perli, a partner at Cornerstone Macro LLC in Washington. <\/p>\n

<\/a><\/strong> <\/a><\/p>\n

Original Article<\/a><\/p>\n

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ET Markets<\/a><\/h5>\n

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By Steve Matthews<\/p>\n

Federal Reserve Chairman Jerome Powell ha..<\/p>\n","protected":false},"author":1,"featured_media":82538,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-82537","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nFed decision-day guide: One or two more hikes in 2018? - Business News Report<\/title>\n<meta name=\"description\" content=\"By Steve Matthews Federal Reserve Chairman Jerome Powell ha..\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bnreport.com\/en\/fed-decision-day-guide-one-or-two-more-hikes-in-2018\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed decision-day guide: One or two more hikes in 2018? 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