In our view, the February jobs report removed the last obstacle for a Fed hike on Wednesday.
We do not expect any major changes to the statement. Fed still awaits more information about 'Trumponomics'.
We expect the Fed to maintain the 'dot' signal for this year at three hikes in the updated projections.
We expect the Fed to hike three times this year (March, July and December) and to begin the reduction of the balance sheet in Q1 18.
Markets have fully priced in the Fed hike this week. Note that markets price in a 50% probability of another hike in June. A total of five hikes is priced in by year-end 2018.
It is worth keeping in mind that the Fed is data dependent and will not hike unless data support the case.
To read the entire report Please click on the pdf File Below