April FOMC meeting: hold at 3.5-3.75%, dot plot one 2026 cut challenged by NFP 178k beat/hot jobs, oil risks, yield volatility, SEP GDP; hawkish splits deepen with Hammack/Goolsbee/key official hike prospects
Key Questions
What was the outcome of the April FOMC meeting?
The FOMC voted 11-1 to hold interest rates steady at 3.5%-3.75%. The dot plot indicated one rate cut projected for 2026, with a tweak to the inflation forecast.
What does the FOMC dot plot suggest for future rate cuts?
The dot plot shows one rate cut anticipated in 2026. However, this projection is being challenged by strong NFP data, hot jobs report, oil risks, and yield volatility.
Why is the projected 2026 rate cut under pressure?
The NFP report beat expectations with 178k jobs added, signaling hot jobs data that reduces the likelihood of cuts. Additional pressures include oil risks from Iran, rising gas prices at $4.12/gal, tariffs, and PCE estimated at 3.5% for April.
Who are the key hawkish Fed officials mentioned?
Hammack warned in an AP interview of potential rate hikes if inflation exceeds 2%, citing Iran, gas prices, tariffs, and PCE. Goolsbee also nodded hawkishly, deepening splits among officials.
What did Fed Chair Powell and Daly say about recent data?
Powell and Daly remained calm regarding oil prices, jobs data, and debt levels. They downplayed immediate concerns despite the hawkish undertones from others.
How has the NFP data impacted market expectations for Fed actions?
The strong NFP of 178k has crushed expectations for rate cuts, with markets now pricing in a 77% chance of a December hold and 10% chance of a hike. It reinforces a hawkish Fed stance.
What upcoming events are previewed in relation to Fed policy?
Key releases include Wednesday's March FOMC minutes, Goolsbee's Tuesday comments, Thursday's PCE, and Friday's CPI. These are expected to support a hold amid high oil prices and a Miran dissent.
What is the current status of inflation metrics mentioned?
March CPI was 3.1%, with April PCE estimated at 3.5%. Officials like Hammack highlight risks from persistent inflation above 2% due to external factors.
FOMC hold confirmed, March 11-1 vote/dot plot one cut but inflation tweak; Powell/Daly calm on oil/jobs/debt; Hammack AP warns hikes if inflation >2% from Iran/gas $4.12/tariffs/PCE 3.5% Apr est/Mar CPI 3.1%; Goolsbee hawkish. NY Fed SCE 1-yr exps to 3.4% reinforces cuts crush (Dec hold 77%/10% hike); Wed March minutes loom/Goolsbee Tue/PCE Thu/CPI Fri preview hold/high oil bar amid Miran dissent; BBH flags minutes for hike signals/Powell nod amid ceasefire relief.