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MarketScape · 03.21.24

Keeping Options Open, but Not Overreacting

Some saw a dovish pivot in Fed Chair Jay Powell’s message, especially given the not-so-favorable inflation data for the last two months. We didn’t see it this way.
  • Markets & Economy
  • Central Banks
  • Monetary Policy
  • Commentary
Key Points
What it is
We explore the Fed’s March policy statement, where Powell noted they are “not going to overreact” to the last two months of inflation readings.
Why it matters
When it comes to the confidence needed to start cutting rates, Chair Powell said he will be focused on inflation and its components.
Where it's going
We remain focused on the services component, which has seen less disinflation than the goods component.
Main Point

Don't Overreact to the Data

Federal Reserve Chair Jay Powell kept his options open this week regarding the near-term path of U.S. monetary policy. When asked about the possibility of a rate cut in May or June, he simply noted that “things can happen during an intermeeting period” and that he “wouldn’t want to dismiss anything.”

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Antulio N. Bomfim

Head of Global Macro – Global Fixed Income

Antulio Bomfim, head of global macro for the global fixed income team, oversees interest rate strategy, systematic volatility, liquidity and monitoring of systemic risk globally. He is also responsible for the firm’s global liquidity management business.

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