• Home
  • Pro
  • Partners
  • Help and support
  • English (UK)
Pepperstone logo
Pepperstone logo
  • Ways to trade
    • Spread betting

      Bet on global price movements in £ per point

    • CFD trading

      Trade on 1000s of assets without owning them

    • Pricing

      Discover our tight spreads, plus all other possible fees

    • Risk management
    • Trading accounts
    • Trading hours
    • 24-hour trading
    • Maintenance schedule
  • Markets
    • Forex

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Indices

      Enjoy 24-hour pricing on the UK100, US30 and more

    • Commodities

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Shares
    • ETFs
    • Currency indices
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
  • Trading platforms
    • TradingView

      Trade through the world-famous supercharts with great pricing

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
  • Market analysis
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

  • About us
    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
    • Spread betting

      Bet on global price movements in £ per point

    • CFD trading

      Trade on 1000s of assets without owning them

    • Pricing

      Discover our tight spreads, plus all other possible fees

    • Risk management
    • Trading accounts
    • Trading hours
    • 24-hour trading
    • Maintenance schedule
    • Forex

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Indices

      Enjoy 24-hour pricing on the UK100, US30 and more

    • Commodities

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Shares
    • ETFs
    • Currency indices
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
    • TradingView

      Trade through the world-famous supercharts with great pricing

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
Monetary Policy

Macro Trader: March FOMC Shouldn’t Be A Game Changer

Michael Brown
Michael Brown
Senior Research Strategist
18 Mar 2024
Share
While the March FOMC meeting may spark some intra-day, or intra-week, volatility for the financial markets, the decision itself seems unlikely to be a game-changer from a bigger picture perspective, with the broader direction of policy set to remain unchanged, as the policy backdrop remains supportive for risk.

What the FOMC do this week doesn’t really matter in the grand scheme of things.

That’s not to say the decision, and latest Summary of Economic Projections (SEP), won’t be interesting. They will, particularly whether recent hotter-than-expected inflation figures are enough to see a modest upward revision to the PCE/core PCE forecasts and, of course, whether the updated ‘dot plot’ comes with any revisions to the December iteration – chiefly, whether the median ‘dot’ again points to 75bp of cuts being delivered this year.

With that said, it is only a hawkish risk, and not the base case, that either of those two shifts are made. In any case, even if the median 2024 dot is nudged 25bp higher than a quarter ago, it seems unlikely that such an adjustment would be a game-changer in the grand scheme of things, besides causing some short-term vol in front-end rates, and likely also knocking equities lower, and giving the greenback a renewed kick higher.

More broadly, the direction of travel that policy is set to take this year should remain broadly unchanged. While the FOMC will remain in no rush to cut, likely reiterating a need to maintain restriction until ‘confident’ that inflation is on its way back towards the 2% target. In other words, continuing to play a data-dependent waiting game.

Of course, this data has been somewhat mixed of late. Headline inflation is beginning to trend in a worrying direction, with CPI having printed hotter-than-expected for three months running, and seemingly having found a floor around 3% YoY. Supercore inflation (services, ex-housing) is also moving in the wrong direction, having remained north of 4% YoY for two months running. While disinflation continues – with February core CPI continuing a streak of monthly declines that begun in mid-2023 – the process is clearly much slower, and much bumpier, than policymakers would desire.

Preview

The rationale behind a wish to be patient in firing the starting gun on the easing cycle is being borne out in current data, with the ‘last mile’ back to 2% increasingly looking like the most difficult.

At the same time, while headline payrolls growth remains resilient, with the 3-month average of job gains sitting at +265k, the highest since last June, signs are beginning to emerge that the labour market may be beginning to rollover – unemployment surprisingly rose to 3.9% last month, while participation remains somewhat shy of the cycle highs seen in Q4 23, at 62.5%.

The problem for policymakers is that it is still too early to tell whether what we are looking at here are data anomalies, or data trends. Naturally, a couple more months’ worth of figures will be needed in order to confidently answer those open questions.

We remain, then, in something of a monetary policy purgatory, and likely will no matter the outcome of the March FOMC meeting. The direction that monetary policy is set to take this year should remain unchanged – cuts are on the way, and an end to quantitative tightening is also due shortly, with both likely to begin in the summer, probably in June.

Preview

Importantly, this is a data-dependent waiting game that will play out with the FOMC sat, ready and waiting, to act if they see a need – either due to a sudden turn in the labour market, more rapid than expected disinflation, or some kind of financial accident.

In other words, while markets continue to hang on every remark that FOMC members make in public, the Fed put remains in place, leaving an insurance policy for both markets, and the economy more broadly. This should, in turn, continue to underpin risk, and allow dips to be well-bought and limited in magnitude, with investors again confident that the Fed ‘has their backs’.

Put simply, what matters is not what the Fed do this week, or even exactly when they do eventually deliver the first rate cut. What matters is the broader path that policy will take this year; i.e., a looser stance, coupled with the optionality to deliver more aggressive support if it proves necessary. Two powerful factors that should limit the extent of equity downside for some time to come, and keep the path of least resistance leading higher.


Related articles

A Traders’ Weekly Playbook: Long event risk, short sleep

A Traders’ Weekly Playbook: Long event risk, short sleep

NVIDIA
Market Events
March 2024 BoE Preview: A Placeholder After February’s Pivot

March 2024 BoE Preview: A Placeholder After February’s Pivot

Monetary Policy
GBP
March 2024 FOMC Preview: No Rush To Cut

March 2024 FOMC Preview: No Rush To Cut

FOMC
BoJ meeting Playbook – a landmine for the JPY but no game-changer

BoJ meeting Playbook – a landmine for the JPY but no game-changer

BoJ

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other Sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to trade

  • Pricing
  • Trading accounts
  • Pro
  • Trading hours

Platforms

  • Trading Platforms
  • Trading tools

Markets and Symbols

  • Forex
  • Shares
  • ETFs
  • Indicies
  • Commodities
  • Currency indicies
  • CFD forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet Our Analysts

Learn to trade

  • Trading guides
  • Videos
  • Webinars
Pepperstone logo
support@pepperstone.com
+448000465473+442038074724
70 Gracechurch St
London EC3V 0HR
United Kingdom
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Sitemap

© 2025 Pepperstone Limited 
Company Number 08965105 | Financial Conduct Authority Firm Registration Number 684312

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Trading derivatives is risky. It isn't suitable for everyone and, in the case of Professional clients, you could lose substantially more than your initial investment. You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your or your client's personal objectives, financial circumstances, or needs. Please read our legal documents and ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice.

Pepperstone Limited is a limited company registered in England & Wales under Company Number 08965105 and is authorised and regulated by the Financial Conduct Authority (Registration Number 684312). Registered office: 70 Gracechurch Street, London EC3V 0HR, United Kingdom.

The information on this site is not intended for residents of Belgium or the United States, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.