TD Securities’ Global Strategy Team expects the Federal Reserve to keep the policy rate at 3.50–3.75% at the April FOMC meeting, describing the Committee as patient given balanced labor markets and oil-driven headline inflation. They see Chair Powell maintaining a neutral tone on future policy and note this is likely his final meeting as chair, with markets watching closely for any comments on succession.

Fed seen steady with neutral tone

"All eyes turn to the Fed meeting on Wednesday, where we expect the Fed to remain noncommittal and, in turn, rates to have a very modest reaction. In addition to the Fed, the Senate Banking Committee will be voting on Warsh's nomination at 10am EST. Rates are likely to continue to move around headlines coming from the Middle East, but they could be reactive if any information coming from Chair Powell's expected tenure comes out in the Q&A."

"The policy rate will remain at 3.50-3.75% at the April FOMC. The labor market remains in balance while headline inflation has picked up due to the oil shock. Given the still-heightened level of uncertainty, we expect the Committee will reiterate a message of patience."

"Chair Powell is likely to remain neutral regarding future policy while comments regarding his future plans post-succession will be of note. This is likely his last meeting as chair."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)