With Fed likely to stand pat on rates, all eyes are on its ‘dot plot’ for fresh clues on outlook

THE biggest news surrounding the US economy this week will likely not be the Federal Reserve’s policy statement, but rather the consumer price inflation data that precedes it or the press conference that follows it.

It’s almost certain that the US central bank will leave interest rates unchanged for the seventh successive meeting, which concludes on Wednesday (Jun 12), at the multi-year high of 5.25 to 5.5 per cent. It’s also unlikely that the Fed will change much of the language in its statement.

The unpredictable part of the six-weekly ritual this time, however, is likely to be the “dot plot”, where central bankers pencil in their expectations for rate changes in the coming year.