The Fed is broadly expected to remain on hold at the April Federal Open Market Committee (FOMC) meeting as policymakers await greater clarity on the conflict in the Middle East and its implications for inflation and growth. Updated TCB forecasts point to a weaker growth trajectory alongside renewed inflation pressures, reinforcing the tension in the Fed’s dual mandate.Fed Firmly on Hold, Powell’s Next Move in Focus
With Senator Thom Tillis clearing the path for Kevin Warsh’s confirmation as the next Chair of the Federal Reserve Board before Chair Powell’s term ends on May 15th, attention is turning to whether Chair Powell will remain on the Board as a governor beyond that point.
With no Summary of Economic Projections or dot plot at this meeting, the focus will be on the policy statement and Chair Powell’s press conference. The Committee is likely to hold rates steady, while emphasizing elevated uncertainty around the economic outlook.
The current characterization of the war in the Middle East that “the implications of developments in the Middle East for the U.S. economy are uncertain” still holds. However, given the high stakes for the outlook, the FOMC could expand language highlighting geopolitical risks, particularly the inflationary impact of higher energy prices and potential drag on acti
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