US: Trump's Approval Rating Slides, Trust In Institutions Near All Time Low

Statement: The MNI Markets Team (and consensus) expects very limited changes to the Statement, outside of changing the characterization of "Uncertainty about the economic outlook" and "risks to both sides of its dual mandate" - which were "has increased further" and "have risen" in May's Statement but will probably be adjusted to say something along the lines of "are/remain elevated". There may be limited mark-to-market changes to the 1st paragraph's description of current economic conditions but nothing market-moving. No dissents to the decision are expected.

Below is the MNI Markets Team's expectations for the shift in the distribution of rate dots vs March's SEP (medians are bolded).

• Developments since the March projections point to a slight drift higher in the 2025 Fed funds rate projection, which are likely to push up the median to 4.125% (one 25bp cut) from 3.875% (two 25bp cuts). For 2025, The split in March was fairly close: 8 of 19 participants saw rates ending the year at 4.125% or 4.375%, with 9 at 3.875% and 2 at 3.625%. This means that only 2 of the 11 lower-rate participants have to shift up their dots to 4.175% or above, and we think that threshold will be met, if only barely.
• 2026-27: A higher 2025 median doesn’t necessarily mean the 2026-2027 dots will shift higher in tandem. The 3.375% 2027 median in the March projections was quite solid: 13 of 19 members were there or below. A few dots may drift up, but it’s likely that the core of the Committee still has an easing bias, and that the decision to be more patient on cuts in 2025 doesn’t mean that the longer-run path needs to change dramatically. If combined with a 25bp rise in the 2025 median, an unchanged 2026 median would imply 75bp of cuts next year, and probably perceived dovishly as it would suggest that the Committee still sees the near-term inflation impact of tariff inflation as being “transitory”.
• Longer-Run: We don’t expect an upward shift in the longer-run dot (currently 3.00%) at this meeting. It would take 3 of 11 participants to shift their dots higher, hardly an insurmountable bar: there are currently 3 dots on 3.00%, with 4 just below that at 2.875% and a further 4 at 2.50-2.625%. However given broader uncertainty it’s likely that participants will wait for another quarterly meeting to move this higher again.

• RES 4: 1.3800 Round number resistance 
• RES 3: 1.3757 1.618 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 1: 1.3632 High Jun 13 and the bull trigger 
• PRICE: 1.3452 @ 15:51 BST Jun 18
• SUP 1: 1.3415 Low Jun 17
• SUP 2: 1.3350 50-day EMA
• SUP 3: 1.3237 Trendline support drawn from the Jan 13 low 
• SUP 4: 1.3140 Low May 12 and key support

A sharp sell-off in GBPUSD Tuesday resulted in a breach of support at the 20-day EMA, at 1.3496. The latest move down is considered corrective and key trend signals remain bullish. The next important support lies at 1.3350, the 50-day EMA. On the upside, the key resistance and bull trigger has been defined at 1.3632, the Jun 13 high. A break of this hurdle would confirm a resumption of the primary uptrend.        

Below are MNI's expectations for the new economic projections out at 2pm ET. Our full meeting preview, including analyst expectations, is Here.

• Starting with the macro projections: broad expectations are for 2025 GDP to be revised down, with inflation and unemployment revised up.
• Roughly speaking, analyst consensus is for the 2025 unemployment projection to rise 0.1pp to 4.5% (though many see unchanged), with real GDP lowered to 1.2-1.4% and core PCE increased 0.3pp to 3.1% (we've seen a range roughly of 2.9% to 3.3%).  Most don't expect meaningful changes to 2026 forecasts.
• The FOMC's 2025 rate dot median meanwhile is seen unchanged by the median analyst, at 3.9% (2 cuts from current levels by year-end). However that's an extremely close call: 11 of 24 analysts who expressed an opinion expect it to shift up 25bp vs March's, to 4.1%, with the other 13 see it remaining at 3.9%.
• Of the 17 analysts who had a view on the 2026 median, 7 saw an upward shift by 25 to 3.6% (the remaining 10 saw no change at 3.4%).
• The longer-run dot is more unanimously seen remaining at 3.0%, with 12 of 15 analysts seeing no change (3 see a rise to 3.1%).