MFS: Commentaar in aanloop naar het Fed-rentebesluit
Erik Weisman, Hoofdeconoom van MFS, geeft zijn commentaar in aanloop naar het rentebesluit van de Fed:
'The FOMC is all but certain to leave federal funds target range unchanged at the April 29 meeting. The broad message from the FOMC will be that policy is in a good place to 'wait and watch' how the growth and inflation outlook evolves.
On March 18th, Chair Powell went out of the way to downplay the Statement of Economic Projections given the uncertainty related to the conflict. He is likely to reiterate the 'conflict dependency of the outlook' as uncertainty related to the Iran war has declined since then but remains very high still. Nonetheless, the market will be keen to detect any changes in nuance regarding the growth and inflation outlook.
The minutes of the March meeting indicated that there is an emerging minority view that rate hikes might be required to guard the inflation side of the mandate. Chair Powell may face questions seeking clarity on what developments may tilt the FOMC in that direction. He will likely assert that it is too early to make that judgement, and that policy is in a good place to balance the two-sided risks to the mandate. That will be in line with the bulk of the Fedspeak since the March meeting.
This will be Chair Powell’s last press conference if Kevin Warsh is confirmed soon. He will likely be queried again about his decision to stay on as a governor after his term as Chair ends and how that decision might change if the DOJ probe is dropped. He will likely repeat that he has not made up his mind yet.'
