FOMC forecast preview:
FOMC forecast preview: the revisions will reveal the extent to which the Fed is willing to resist market pressure to mark down their Fed funds rate assumptions in the dot-plot, and their economic forecasts as well. Analysts expect the new dot plot projections to show no change in the target rate in either 2019 or 2020; currently the median shows a 25 bp hike in 2020. It's also likely some new estimates will show a rate cut this year, versus prior estimates that showed a "hard deck" at the current 2.4% rate. And Bullard may even dissent against an unchanged stance. The estimated longer run rates should be trimmed as well. Prior Fed GDPestimates low-balled the outlook for 2019 in our view, and analysts see room for hikes in the lower-end estimates despite renewed trade war fears. The current 2019 GDP central tendency to 1.9%-2.2% is skewed below our own 2.4% forecast. The Fed's PCE chain price estimates for 2019 are poised to be lowered, given current central tendencies of 1.8%-1.9% for the headline and 1.9%-2.0% for the core, versus our own respective estimates of 1.7% and 1.8%. The 2019 jobless rate central tendency could remain at 3.6%-3.8%, versus the current 3.6%.