Nine Fed Officials See a Rate Hike This Year

Nine of the 18 Federal Reserve officials who do not hold a voting seat on the rate-setting committee this year anticipate at least one rate hike in 2025, according to the central bank's latest dot plot projections released last week.

That hawkish tilt sits alongside the median projection showing two quarter-point cuts. The growing minority of hike advocates suggests the committee is less unified on the easing path than earlier in the year. Markets had priced a higher chance of cuts than hikes heading into the meeting.

A rate hike, if realized, would push short-term real yields higher and strengthen the dollar. Gold, which has rallied this year on rate-cut expectations, would face headwinds from a firmer dollar and higher opportunity cost of holding the metal. Growth stocks with long-duration cash flows would also be vulnerable to a higher discount rate.

The next data points that will test the rate path are the February jobs report due March 7 and the March consumer price index print on March 12. Both will feed into the committee's thinking ahead of the March 18-19 meeting.