BlockBeats News, June 18th. Several institutions are looking ahead to the Fed's SEP and dot plot changes. The market is focused on whether the new Fed Chair, Kevin Warsh, will submit his personal dot plot forecast, as well as whether inflation expectations will be revised upwards and the rate cut path will be delayed. UBS expects the Fed to raise its inflation forecast. Most committee members believe that a rate cut is not appropriate before 2028, with the median dot suggesting a rate cut in 2028, but the policy stance will remain tight. Goldman Sachs expects the median dot to show that interest rates will remain unchanged in 2026, with final forecasts still indicating one rate cut in both 2027 and 2028. The 2026 economic forecast may indicate a slight decrease in GDP growth and the unemployment rate, with a significant upward revision in inflation.

Barclays anticipates that the latest dot plot may reflect higher inflation expectations and a more cautious policy stance, meaning rates will remain unchanged throughout 2026, with only one rate cut in 2027 and a hold steady in 2028. BNY Mellon expects a slightly hawkish adjustment in the dot plot, with the median forecast likely to drop the previous expectation of a rate cut by the end of 2026. PIMCO anticipates a significant hawkish shift in the dot plot, with several rate hike forecasts in 2026, but the median still indicates no change.

Opinions are divided among institutions regarding whether Warsh will submit his personal forecast. Goldman Sachs, Capital Economics, TD Securities, and Bank of America expect Warsh may not submit his personal dot plot forecast. Specifically, TD Securities believes this could be a strategic move to minimize any hawkish signals that the June dot plot may convey. Bank of America suggests that Warsh's reason for not submitting a personal forecast is his lack of belief in forward guidance, and they expect economic growth forecasts to be downgraded to 2.1%, with a significant increase in inflation. JPMorgan, on the other hand, expects Warsh to submit his personal forecast, as not doing so would appear as a clear dissent against the committee he leads. Jefferies stated that Warsh has explicitly expressed his disagreement with forward guidance during the Senate hearing, which will be the most significant change and may be reflected in a shorter FOMC statement and reduced SEP details. (FXStreet)