Yesterday the Federal Open Market Committee (FOMC) of the Federal Reserve spoke.  And, fortunately for the markets, the Fed had a good story to tell.

As a reminder, the FOMC is comprised of 19 members.  Of which, 12 are voting members any given year.  Yesterday’s update included data for this year, 2025, 2026, and “longer-run.”  It is customary to view the median estimates taken from the 19 members. 

• According to the FOMC’s Summary of Economic Projections, the median consensus of the 19 committee members projects a 50% higher growth rate measured by Gross Domestic Product (GDP) in 2024, than estimated back in December.  That’s 2.1% vs 1.4%. 

• They see their preferred measure of inflation (PCE) increasing 2.4% this year, the same view held in December.  And, their survey suggests core inflation (excluding food and energy), which tends to be more volatile, to be 2.6% vs 2.4% as thought in December. 

• On the employment front, they see unemployment slightly lower than thought three months ago for 2024. 

• The FOMC updated their dot plots.  This is the chart where each of the 19 members places a dot showing their respective best guess as to where interest rates will wrap up the end of this year, 25, 26, and longer term.  The median consensus is that rates will be approximately 75 BPS (3/4 of 1%) lower by the end of this year. 

• The FOMC will next meet on April 30/May 1. The next Summary of Economic Projections is scheduled to be released June 12.

Summary:  The FOMC mean estimates suggest the economy is growing faster than previously suspected, that inflation is marginally higher, that employment looks stronger, and yet three cuts of 25 BPS for the Fed Funds Rate are still anticipated this year.  As Powell indicated, inflation is bumpy.  This is why the FOMC and investors around the world will be watching key data points over the coming months.  Perhaps the FOMC is accomplishing the unthinkable by creating a soft landing whereby the economy continues to grow and over time inflation comes back down to more reasonable levels!   Until next time…All eyes on the horizon…