Mizuho Bank: No change in policy from Fed in March meeting likely

Mizuho Bank analysts suggest that the focus of the markets this week is sitting squarely on 20 March FOMC meeting, wherein a no change in policy is expected, so focus will be squarely on the press conference, new forecasts & Dot Plot.

Key Quotes

“A marginally firmer US dollar and a slightly higher oil prices should cancel each other out in terms of the inflation forecast. The risks to the CPI forecast are on the downside but should be modest. Despite downward revisions to growth forecasts elsewhere, the US economy is holding up quite well and the Fed’s GDP forecasts are expected to be little changed.”

“Limited changes in the growth and inflation forecasts suggest limited changes in the dots. However, we suspect that with downside risks to activity overseas remaining on the radar, there will be a small downward revision to the dots but that they will still imply that higher policy rates rather than lower policy rates are more likely.”