March 2024 FOMC Update

Gary Pzegeo, CFA

March 20, 2024

A summary of the Federal Reserve's March 2024 meeting

The Federal Reserve (Fed) left its policy rate unchanged, electing to remain in the range of 5.25% to 5.50% for a fifth consecutive meeting.  Interest rate markets spent the better part of the last three months adjusting to a more gradual shift toward lower rates and were not expecting a rate change today.   

Current Conditions – The Fed’s statement recognized an increase in job growth since their last meeting.  The Committee’s economic projections confirmed the faster pace of growth and slowing pace of disinflation seen in recent data.  The Fed raised its estimate for GDP to 2.1%  from 1.4% for 2024.  The projected rate of core inflation was also increased for the full year to 2.6% from 2.4%.

Forward Guidance – Powell repeated the Committee’s view that policy rates are currently at a peak for the cycle.  The most closely watched data point from the Fed could be the policy rate projection for the current year.  The median projected rate from the Fed’s “dot plot” was unchanged, confirming market expectations that the Fed would cut rates by 0.75% by the end of 2024.  The Committee did remove a cut from its projections for 2025, but Powell indicated that the Fed would be unlikely to change its shorter-term trajectory based on recent inflation data.

Policy/Market Reaction – Today’s move was unanimously approved by the Committee.  Quantitative tightening (QT) will continue at its previous pace, but Powell noted that the Fed plans to slow the pace of QT “fairly soon”.  Following the press conference, shorter-term  interest rates fell at the margin and riskier assets rallied on the unchanged 2024 rate projection.


Gary Pzegeo, CFA  joined the firm in 2007 as head of fixed income, focusing on portfolio management, trading, policy formulation and client service.