FOMC Preview: Rate hike very likely, median dot to show 4 hikes in 2018 – Goldman Sachs

Goldman Sachs’ analysts are out with their expectations on today’s FOMC monetary policy outcome due at 1800 GMT, with the new Fed Chair Powell set to hike rates and show a more hawkish Fed dot chart.

Key Quotes:

“The FOMC looks very likely to raise rates at this week's meeting, the first with Chairman Powell at the helm.

With tax cuts now implemented and an additional boost from higher federal spending this year, we believe most participants are embracing the "from headwinds to tailwinds" narrative.

Reflecting this, encouraging growth data, and further evidence that core inflation is moving back to target, we expect a slightly hawkish tone 

Public remarks by Fed officials suggest a broad shift in the committee's outlook towards a potentially faster pace of tightening, and we expect the median dot to show four hikes in 2018, up from three at the December meeting.

Additional hawkish changes-a move to three hikes in 2019 or an increase in the longer-run funds rate estimates-are also possible but not our base case.”