While the outlook for the economy appears brighter Wednesday after the gross domestic product report, the Federal Reserve is likely going to play it cool and not overreact, Fed watchers said.
The statement is likely to be only a “little more cheerful,” said Thomas Simons, an economist at Jefferies.
Josh Shapiro, chief U.S. economist at MFR Inc., said the data will make “the conversations more heated between the doves and the hawks.”
Hawks are urging the Fed to get the process of normalizing monetary policy started, while the doves have been resisting to give the labor market more time to heal.
While the debate may be heated, the Fed will not tip its hand this afternoon, Shapiro added.