From CNBC:

Federal Reserve Chairman Jerome Powell testified before the House Financial Services Committee, focusing on monetary policy outlook. The central bank is expected to reaffirm its patient approach to rate cuts until inflation is clearer. Markets have adjusted expectations for a rate-cutting campaign, with only three cuts anticipated from the current range of 5.25%-5.5% for the Fed’s benchmark rate.

At its meeting, the Fed will update economic projections and release the ‘dot plot’ showing expectations for rates through 2026. It would only take two FOMC members to get more hawkish to reduce rate cuts this year to two. Powell is expected to guide the committee on the path to gain confidence in policy rate cuts.

The FOMC will not cut rates in March, with a focus on the economic outlook, including GDP, inflation, and unemployment rate estimates. The Summary of Economic Projections (SEP) may show a forecast of three cuts this year. Economists predict a slight upgrade in GDP forecast but are unsure about inflation outlook changes.

Markets will watch for the Fed’s stance on fewer expected cuts this year, possible details on balance sheet reduction, and its influence on global central banks’ policies. Central banks worldwide look to the Fed for cues on inflation. Powell may discuss slowing and ultimately halting the reduction of bond holdings, impacting global economic policies.



Read more: What to expect from the Federal Reserve’s policy meeting Wednesday