Deutsche Bank: The Federal Reserve may imply a hawkish stance by removing the word "further"

Golden Ten Data reported on April 29 that Federal Reserve watchers do not expect the Federal Reserve’s statement to undergo major changes, but they note that there may be some subtle adjustments. For example, officials may modify language describing the labor market to acknowledge recent data showing that, despite fewer hiring activities, the labor market has stabilized. Some officials also hope the Federal Reserve will make clear that the next policy move could be a rate hike — not a cut — because the situation in Iran has intensified existing inflationary pressures. To signal this view, officials could slightly adjust the wording regarding the “extent and timing of additional adjustments to the benchmark interest rate.” Economists at Deutsche Bank wrote in a report: “A hawkish statement might remove the term ‘additional,’ as that term suggests a dovish tilt, in fact implying a continuation of a series of rate cuts.” The Federal Reserve made three rate cuts by the end of 2025.