CB Views: April 2026 FOMC Preview

Scenario 

Probability 

Assessment

Dovish Pause

 25%

• It's hard to be even more dovish than just being neutral in the face of oil induced inflation fears capturing the imagination of both markets and policymakers alike. That said, Powell could emphasize that this oil shock may end up proving to be transitory, and historically, initial inflation typically fades and then growth takes a hit. 

 Neutral Pause

Base-Case

 70%

• Statement: We think that the statement avoids suggesting that jobs growth has improved, even though optically, the last few NFPs have, on average, turned for the better (which then get revised lower in subsequent months or later via the QCEW process). Instead, they will continue to highlight that the unemployment rate remains low. They will keep the risk assessment linked to the Middle East conflict intact. Without the SEP process, we do not expect major changes in this official communique.
• Presser: We expect chair Powell to come across as neutral as possible at his likely last FOMC chaired event (we assume Kevin Warsh will be in the seat by the next FOMC meeting in June and that Powell’s term ends as planned on May 15th). The uncertainty from the war has likely impacted smaller firms more than larger firms. Meanwhile, there remains a tension between labor and inflation. Overall, we expect Powell will continue to say that they will need to see more data to assess the full impact that the disruptions to energy and energy related prices may bring.
• Market Reaction: All assets welcome a neutral sounding message with minor rally

Hawkish Pause

5%

• Our lowest probability is a hawkish pause as we doubt they wants to rattle markets