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Today, world markets are keenly awaiting the outcome of an all-important meeting of FOMC, and as we move towards the decision timings, here are the expectations as forecasted by the economists and researchers of 14 major banks.

The consensus amongst most economists and analysts suggest  that the Fed will likely leave its current policy rate unchanged, and in addition, they are expecting that the Fed Chair Powell will  likely maintain its patient approach stance.

Morgan Stanley

The Morgan Stanley analysts expect the US Federal Open Market Committee (FOMC) to make no changes to its interest rates, but expect another 5bps IOER cut.

“We expect the FOMC to leave its target range unchanged at 2.25%- 2.50%.  

“With increased volatility in the effective federal funds rate and a press conference following this meeting,  our rates strategists look for the Fed to deliver another 5bp IOER cut.”

“The statement gets only small adjustments to the current conditions paragraph describing the rebound in consumer spending and lower core inflation.”

“The press conference affords Chair Powell the opportunity to respond to concerns about softer readings on inflation and offer his take on the underlying strength of the economy, as well as the Fed’s current view on financial stability. He could also provide further details on the Committee’s discussion of the longer-run composition of its balance sheet.”

Standard Chartered

“We expect the May FOMC meeting outcome to be neutral on the policy stance; we anticipate additional operational guidance, which could be liquidity-positive but would not have any implications for the policy stance.”

“We do not expect a cut to the IOER, the rate of interest the Fed pays banks on excess reserves, in May. However, we do expect the Fed to acknowledge (likely in the press conference) recent money-market volatility, including the overshoot of IOER by the effective fed funds rate (EFFR) – the first since the IOER was introduced in October 2008. These moves were likely temporarily exacerbated around the 15 April tax deadline and should abate in the coming weeks.”

“We therefore expect Chair Powell to express the Fed’s readiness to lean against such an overshoot should it persist, but to state that it is not currently necessary. To reinforce this point, he is likely to lay out a range of tools the Committee could use should the EFFR overshoot persist, including an IOER cut, temporary open-market operations, a standing repo facility or an earlier end to the balance-sheet taper, currently projected for September 2019.”

TD Securities

According to analysts at TD Securities, with only minor mark-to-market changes expected at the May meeting, the statement is unlikely to get much attention. Rather, markets will focus on Fed Chair Jay Powell’s remarks in his press conference.

“Overall, we expect Powell to stay on message with a patient approach in order to continue to support the expansion. These comments should be neutral for a market that is aggressively pricing in cuts for this year. That said, Powell has surprised in a more dovish direction at the last few meetings.”

“The biggest dovish risk for the statement would be if “patient” was replaced by language suggesting that “the Committee stands ready to adjust policy as necessary” to support the expansion. We see a modestly low probability of this change, but we cannot rule it out.”

“Similarly, while we expect Powell’s comments will keep open the possibility of rate cuts later this year, it would be both notably dovish and unexpected if he suggests the FOMC is actively considering scenarios in which the Fed cuts rates.”

“While rates will remain on hold through next year in our view, markets will be keenly focused on any hints that the Fed may be contemplating rate cuts this year. We expect Powell to be very noncommittal in his press conference answers, suggesting the Fed has no policy lean or bias and stands ready to adjust its tools as needed.”

National Bank Financial

“Recent communications by FOMC members sounded cautiously optimistic, many of them shrugging off recession risks and showing growing confidence that the U.S. economy would stay on track going forward. While this suggests rate cuts may be out of the equation at this point, we don’t see the Fed returning to its hiking bias anytime soon, especially as it tries to convince markets that its 2% inflation target is a symmetric one.”

“Economic news, especially on the inflation front, will need to surprise FOMC participants on the upside for a while for that to happen. We’re not there yet and, consequently, we see the Fed staying on the sidelines at this juncture.”

Nordea Markets

According to Kjetil Olsen, analyst at Nordea Markets, the US Fed will not change their patient stance this week, and they don’t think Powell will even try to rock the boat at the press conference.

“We and the market will focus on new views on inflation and inflation expectations.”

“The U.S. economy is according to the Fed “in a good place and operating close to both of the Federal Reserve’s dual-mandate objectives of maximum employment and price stability”.”

“Overall, we think the Fed still feel they are at a good place and don’t think they will want to signal a different view on policy going forward. Market reactions should therefore be muted. As there are no new forecasts and the statement is short, focus will be on the press conference. We and the market will particularly look for any new views on inflation and inflation expectations and the discussion around overshooting.”

Bank of America Merrill Lynch

“As widely  expected,  we  expect the FOMC to  stay on hold at the conclusion of the  30  April-1  May meeting.  The Fed  should deliver a balanced message  on the economy  through the policy statement and the press conference.”

“A hawkish rates response to this Wednesday’s FOMC decision is likely to provide support to the USD.”


“At this week’s FOMC meeting on Wednesday, we expect the Fed to maintain the committee’s current policy stance, reemphasizing its “patience” with respect to interest rates and confirming its plans to end its quantitative tightening  program. Moreover, with respect to risk management, we believe the committee will maintain its view that risks are asymmetrically skewed to the downside.”

“The committee will have to address how they are incorporating the nontrivial pivot in the domestic economy and the easing of financial tensions into their outlook for the remainder of the year.”

“Most members believe the economy is at or above potential, and that growth is likely to be close to potential this year. If growth surprised to the upside and there was a nontrivial rise in inflation, inflation expectations or significant increase in wages pressures, the FOMC may begin to reconsider raising rates at the end of the year. This fine-tuning would allow the Fed to get policy rates closer to neutral levels in this normalization cycle.”

Danske Bank

“Today’s main event is the FOMC meeting tonight; however, the Fed has stated that it is on hold, so we expect it to keep the target range unchanged at 2.25-2.50%.”

“We do not expect the Fed to make a 5bp ‘adjustment cut’ of its interest on excess reserves (IOER) at the meeting tonight, but the Fed will likely discuss what to do at upcoming meetings if the upward pressure on Fed funds does not ease over the coming months.”


“The improvement in economic data in recent weeks may be reflected in slightly more upbeat comments on the economy in the formal FOMC statement.”

“The inflation outlook is also improving somewhat on the back of rising oil prices, although market-based measures of inflation compensation remain below levels that we saw most of last year.”


“We have no strong reason to expect the FOMC to move the market; although we can’t be sure how Powell will play it at his press conference.   President Trump has pushed again for rate cuts on the eve of the FOMC, and Powell will be certain to field questions on the President’s call for lower rates.”

“Powell may also be asked whether the Fed should cut rates to push up inflation and inflation expectations; especially in light if the recent fall in inflation data.”

“The Fed is likely to remain quite confident in an outlook for solid, sustained growth in the economy and prospects for solid wage growth.   As such, the over-riding message should be that rates are on hold for the foreseeable future.”

“If Powell appears to remain comfortable with the current Fed-funds target, this may then tend to reinforce the high-yield advantage of the USD.   Over time, this could reinforce a relatively strong USD, in an environment where global yields and credit spreads are stable or falling.”

“As an aside, the FOMC may make a small cut to its IOER (2.40%) or discuss alternative arrangements to place some downward pressure on its target Fed funds rate that has crept above the IOER.”


“The March FOMC meeting confirmed the dovish turn in sentiment amongst Committee members, with the activity and rates forecasts revised down, and risks emphasised.”

“Communications from this meeting are likely to carry the same cautious tone, although it will be interesting to see how Chair Powell contrasts the renewed vigour of equity markets and employment growth against their now more cautious forecasts.”

“While we are mindful that wages and inflation could surprise to the upside later this year, the scale of any surprise is unlikely to be meaningful for policy, with FOMC members willing to accept a period of above-target inflation outcomes before becoming concerned over the outlook.”


“To maximise relevance, the  FOMC  committee will this week have to address its recent characterisation of headline growth, which has not slowed, as the 20 March statement observed. It has actually accelerated – although private consumption growth and business fixed investment did cool. Irrespective, we expect no change in the  FOMC’s interest rates guidance.”

“Inflation is below target (March core PCE 1.6% y/y) and despite still-strong headline growth and robust momentum in the labour market, a sustained acceleration in core inflation remains elusive. That is contributing to low inflation expectations. This is not just an issue for the  FOMC. It is a real concern for the ECB, BoJ and other major central banks.”

“We expect the dovish tone from central banks to continue for the foreseeable future. Given evidence of a recovery in growth, this is very positive for risk assets.”


“The Fed is widely expected to keep rates on hold at FOMC meeting conclusion, though we do see a chance that it reduces the IOER rate by 5bp in a technical move. While we won’t get an update to the dots projections at this meeting, there will be a press conference, and we expect Chair Powell to continue to sound comfortable with the Fed’s current ‘wait and see’ neutral policy stance.”

“Growth indicators have firmed since the last meeting in March, though the Committee is likely to acknowledge the temporary factors driving the strength in Q1 GDP. However, inflation has actually softened, and is likely to remain muted over the coming year at least, in our view.”

Deutsche Bank

“While no policy change is expected, all eyes will be on how Powell and the Committee balance the dichotomy of improved growth prospects and easy financial conditions on the one hand and easy softening inflation pressures on the other – as Friday’s Q1 GDP report details showed.”

“Our economists ultimately believe that the Committee is likely to continue to emphasize that the current policy remains appropriate and that patience remains the proper prescription.”