Fed's Hawkish Stance May Limit Rate Cuts to Two

US yields are trending higher as the March dot plot from the Federal Reserve may signal only two 25bps interest rate cuts this year, down from the previously expected three reductions. The core PCE's monthly growth rate hitting a one-year high in January indicates that inflation remains a concern, supporting the Fed's stance on keeping interest rates elevated.
The split between Fed members projecting two vs. three rate cuts was close, with a shift from three to two cuts potentially leading to a more hawkish median dot plot. Strong core PCE data may prompt this adjustment, causing US 2-year yields to rise towards 4.9% as traders realign their expectations. $S&P 500 Index(.SPX.US)$ $Nasdaq Composite Index(.IXIC.US)$ $Dow Jones Industrial Average(.DJI.US)$