Rabobank’s senior U.S. strategist, Philip Marey Global Economics & Markets, discusses the upcoming Federal Open Market Committee (FOMC) meeting, where the Federal Reserve (Fed) is expected to keep policy unchanged and Chairman Powell may face questions about the economic impact of the war with Iran. The bank continues to forecast two rate cuts in 2026, in September and December, but warns that war-related data could prompt the bank to remove rather than add the cuts from its forecasts.

FOMC suspended due to possible cuts

“The FOMC meeting is widely expected to remain suspended for the April 28-29 meeting. Governor Miran may again object.”

“During the press conference, Powell could shed light on the FOMC’s position on this month’s economic data, how it reflects the impact of the war with Iran and what it means for monetary policy.”

“We still expect two rate cuts this year, one in September and one in December. When Warsh becomes the new chairman, he will try to persuade the Commission to make more than one cut, according to the latest forecasts.”

“Whether he succeeds in doing so depends on incoming economic data, which will be heavily influenced by the war. Overall, we believe we will drop interest rate cuts from our forecasts rather than add them in the coming months.”

“It is still unclear whether the April meeting will be Powell’s last as Fed chairman. If Warsh’s confirmation stalls, Powell could still serve as chairman pro tempore in June.”

“During the press conference, Powell may also be asked about his future as Fed governor after his term as chairman ends on May 15.”

(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)