“The committee thought overall that it was appropriate to moderate the pace, if only slightly,” (… ) “That gives us more information to make decisions. We may try to make better decisions. It allows the economy a little more time to adapt as we make our decisions going forward.”
Jerome Powell

It appears that the Federal Reserve’s hand was ultimately coerced or they at least saw little upside from surprising markets with a hike. From our perspective, there seems to be little justification for a skip if a hike is planned for July in any event, leaving us to ponder why markets have bought into Powell’s bidding rather uncritically. The Dot plot here reflecting the “higher-for-longer” narrative is the ever-more prevailing sentiment at the FOMC despite the “pause”:

Chart 1: FED’s new dot plot

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