The Economic Week Ahead: March 20-24

The FOMC always seems to take center stage in the financial markets these days, and will certainly do so on Wednesday, when the next two-day meeting of the FOMC will end around noon. It will be followed by the release of the FOMC's statement at 2:00 pm and Fed Chair Powell's presser at 2:30 pm. He should be less hawkish than he was during his congressional testimony on March 7. He will have to address the impact of the banking crisis on monetary policy and the overall economy.

The FOMC is likely to vote for a 25bps hike in the federal funds rate to 4.75%-5.00%. Powell should acknowledge that the banking crisis suggests that the rate is restrictive enough to slow the economy and moderate inflation. So additional rate hikes may not be warranted. A decision of no rate hike is a possibility, although it would be deterred by the consideration that it might heighten the public's fears that the banking situation is worse than widely realized.