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Happy Fed Week! Here’s what we’ve got for you today:

1. The Dot Plot is coming: March Fed week 🧮

2. What do others think about rate cuts? 🤔

By the way, this article on Max Purchase Calculator is the most clicked link in this newsletter, you should check it out if you are interested.

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[Read Time: 3-4 min]

Rates Today 📈

The Dot Plot is Coming: March Fed Week 🧮

It is everyone’s favorite week - Fed Week 🍾. 

The last time we saw Jerome Powell and the gang was at the end of January. Rates were hovering around 6.5%. Since then, we have gotten little to no positive economic news.

The result - rates have jumped to their highest levels since the beginning of December.

This Fed meeting will have more meat on the bone than January for one reason: the Dot Plot.

If you remember, the last time we saw this bad boy was during the December Fed meeting. It is a summary of economic projections from Fed members. The dot plot, essentially, lays out the Fed’s projected roadmap for the remainder of the year and over the next several years.

These projections come out quarterly, so we won’t see this again until June.

The market is sitting on pins and needles waiting to see if the Fed still plans on cutting rates in 2024.

If you remember from December, the Fed projected to cut rates 75bps during 2024 - and many market participants forecasted the first cut in March. That is certainly not the case today.

After the economic news coming from CPI and PPI throughout February and March, the question many economists are asking is now - “will the Fed cut rates at all this year?”

My inclination is that there are still rate cuts to come this year. We have been in this rate window between 6.5% - 7.125% for all of 2024. We are at the ceiling of that window today.

I think we will begin to see the Fed cut rates in their July 31st meeting. But remember, mortgage companies will get ahead of that. So, if that does prove prescient, we should start seeing rates fall, aggressively, in June.

The Dot Plot could very well change these projections, it is difficult to determine exactly what the Fed will do here.

Keep an eye out for the frequently read, Fed Coffee Corner, on Wednesday to get more information about the Dot Plot, its immediate impacts, and what it will mean for the Spring months.

What do others think about rate cuts? 🤔

Remember - this whole “three rate cuts” narrative all comes from the Dot Plot in December - that is how impactful this report is.

Thanks for reading - that is all we have for today 😎

Please forward this to your friends and colleagues if you found it valuable.

— Michael F DiLucchio