The Week Ahead: The Fed Addresses Interest Rates, Inflation

On Wednesday, the Federal Open Market Committee (FOMC) Chairman Jerome Powell and the FOMC will hold the Committee's next meeting and press conference. During March's meeting, the FOMC announced that the Fed does not intend to raise rates this year, keeping interest rates steady at a range of 2.25 and 2.5 percent. Powell noted solid job gains and low unemployment rates, as well as little change in payroll employment in February.

The FOMC also noted that inflation has declined in the past year, citing lower energy prices, though inflation for items other than food and energy has remained at around two percent. In a statement. The FOMC stated that a rate hike may still be possible.

“The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective as the most likely outcomes,” said the FOMC in a statement. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”

According to LendingTree Chief Economist Tendayi Kapfidze, the Fed’s outlook may be an overreaction resulting from December’s market volatility and the recent government shutdown.

“In our interpretation, the Fed may be overreacting to market volatility that occurred in December and distortions to economic activity and data from the government shutdown,” Kapfidze stated. “While many measures of economic growth have slowed, sentiment data which is more timely has rebounded from those declines. There are also seasonal distortions that have been occurring in the first quarter, with the economy often accelerating in the second and third quarter.”

Here's what else is happening in the Week Ahead:

• Conference Board Consumer confidence index—Tuesday, 10 a.m. EST
• NAR Pending Home Sales Index—Tuesday, 10 a.m. EST
• Senate Banking Committee Hearing—Tuesday, 10 a.m. EST
• Fannie Mae First Quarter 2019 Financial Results—Wednesday, 8 a.m. EST
• Census Bureau Construction Spending Report—Wednesday, 10 a.m. EST