Danske Research previews this week's April FOMC meeting and the Fed trajectory under the incoming Fed Chairman, Kevin Warsh.

"This week’s FOMC meeting will likely remain uneventful in terms of actual policy signals. With no new economic forecasts or dots, Powell’s remarks will be in focus, and naturally not just because of policy. One of the more interesting things to follow will be if Powell makes an announcement about staying or stepping down from the Fed Board of Governors after his term as the Chair ends. Kevin Warsh is taking Stephen Miran’s seat on the Board, so even if Warsh is open to the idea of cutting rates, he is also replacing the most dovish member of the current Board. But if Powell decides to step down, and Trump ‘renominates’ Miran back to the Board, the FOMC could become marginally more willing to ease policy," Danske notes.

"We still call for two more Fed cuts this year, in September and December, while markets only price in a cumulative 9bp worth of cuts by year-end. A key argument for our dovish call is a view that US economic growth will disappoint the current consensus," Danske adds.