pred-2026-03-19-037
The FOMC's March 2026 SEP (released March 19) will show the median federal funds rate projection for end-2026 at 3.75–4.00% or higher (implying ≤2 cuts from 4.25–4.50%), AND the median 2026 PCE inflation projection will be revised upward from the December 2025 baseline of 2.5%.
- created
- 2026-03-19
- resolves
- 2026-03-20
- resolved
- 2026-03-20
- outcome
- 0
- brier
- 0.5476
- base rate
- 0.62
- meta-confidence
- medium
Tradition weights
- institutionalist0.35
- keynesian0.25
- austrian0.22
- marxist0.18
Evidence for (9)
- Tariff-driven cost-push inflation not present in December 2025 SEP baseline; pass-through is still working through the price system as of March 2026
- Gulf escalation (Iranian official killed, Qatar LNG facility struck, missile debris hits Dubai) injects oil price shock into supply chain that systematically biases PCE estimates upward
- Post-2021 'transitory' institutional memory: FOMC has internalized asymmetric cost of under-acknowledging inflation; path dependence strongly favors early upward revision
- Credibility preservation logic (all four frameworks): upward PCE revision + stable dot is the coherent institutional message; cost of premature dovish pivot exceeds cost of holding
- Four independent frameworks converge on identical directional prediction — rare cross-paradigm consensus elevates signal strength
- Keynesian Minsky constraint: financial markets' cut expectations create asymmetric trap that constrains dovish SEP signaling even if private demand weakens
- Austrian knowledge-problem bias: Fed PCE models systematically underestimate forward supply-side distortions; upward revision is the correction of backward-looking model error
- Jones Act waiver (signaling executive inflationary concern) adds political-economic corroboration that inflation is the operative constraint
- 2022 SEP precedent: six consecutive rounds of upward PCE revision and compressed cut expectations under supply-side inflation — same structural configuration
Evidence against (6)
- Demand destruction from tariff uncertainty could suppress inflation sufficiently to hold PCE at 2.5% — paradox of thrift operating at scale if household precautionary saving spikes
- Dollar appreciation under tariff regime creates disinflationary offset on import prices, potentially neutralizing tariff pass-through in PCE basket
- Trump administration's explicit preference for lower rates creates unusual executive pressure that could move median dot dovishly via non-economic channels
- Geopolitical shocks (Gulf escalation) emerged rapidly before the March 19 SEP cut-off — FOMC may treat as too recent to incorporate into median projection vs. alternative scenarios
- Possibility of unusual dot dispersion rather than clean median shift — institutionalist analysis assumes coherent committee behavior that may not materialize under current polarization
- If preliminary March 2026 CPI/PCE prints showed unexpected deceleration ahead of the meeting, the upward revision case weakens independent of structural arguments
Reasoning chain
Base rate of ~0.62 reflects the joint probability of two co-occurring SEP outcomes (dot ≥ 3.75 AND PCE revised up) under supply-shock conditions, derived from 2022 SEP revision history. All four frameworks independently predict YES to both conditions — cross-paradigm consensus at this level is rare and constitutes strong upward pressure on the base rate. The institutionalist framework carries the highest weight (0.35) because it most directly models the actual mechanism: the FOMC is an institution whose post-2021 path dependence and credibility-maintenance logic determines the SEP revision direction independently of any single macroeconomic theory. The Austrian framework (0.22) provides the strongest empirical mechanism: systematic PCE model underestimation of supply-side distortions creates a predictable upward correction bias. The Keynesian framework (0.25) identifies the specific structural trap that constrains dovish moves even when demand weakens. The Marxist framework (0.18) contributes the insight that the institutional constituency asymmetry makes the directional bias self-reinforcing. Counter-evidence — demand destruction, dollar appreciation, Trump pressure — is present but these are second-order effects that historically do not override supply-shock inflation acknowledgment in the immediate SEP round. The joint probability upward adjustment from 0.62 to 0.74 reflects the unanimous cross-framework convergence minus a discount for political uncertainty and the demand-destruction tail risk.
Philosophical basis
Institutionalist framework grounds the prediction most directly: the FOMC's credibility apparatus, post-2021 path dependence, and collective action dynamics determine the SEP revision direction as an institutional output. Austrian and Keynesian frameworks provide the macroeconomic mechanism (supply-side inflation stickiness, stagflationary trap) that gives the institutional logic its content. Marxist framework adds the structural observation that the institutional constituency distribution is asymmetrically creditor-aligned, removing a potential dovish pressure that might otherwise exist if borrower-class interests had institutional representation.
Falsification criteria
Prediction is FALSE if: (1) the median end-2026 dot falls below 3.75% (implying ≥3 cuts), OR (2) the median 2026 PCE projection is held at 2.5% or revised downward. Either condition alone falsifies. Verified directly from the published March 2026 SEP tables.
Sources
- Gulf escalation: Iranian intelligence chief and Larijani killed, Qatar LNG facility struck, Dubai missile debris — oil price surge as of 2026-03-18 rolling brief
- Jones Act waiver: Trump waived Jones Act to curb gas prices amid inflation pressure — signals executive acknowledgment of inflationary conditions
- Framework tracking: all four frameworks at equal weight (0.25 each) as baseline; prediction adjusts tradition weights based on explanatory power for this specific institutional question
Brier breakdown
Post-mortem
Auto-resolved (falsified, confidence=0.95). Evidence: The March 2026 SEP (released March 18, 2026) shows the median federal funds rate projection for end-2026 at 3.4%, which is well below the 3.75–4.00% threshold required for the prediction to be confirmed. This reflects a path implying roughly 3+ cuts from the 4.25–4.50% starting point, exceeding the '≤2 cuts' condition in the prediction. The median 2026 PCE inflation projection was revised upward to 2.7% from December's 2.4% baseline — this part of the prediction was directionally correct — but that alone cannot confirm the prediction since either falsification criterion independently decides the outcome. Sources: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260318.htm; https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20260318.pdf; https://investinglive.com/centralbank/fomc-march-2026-dot-plot-and-central-tendencies-of-economic-forecasts-20260318/. Reasoning: Falsification criterion (1) is met: the median end-2026 dot is 3.4%, which falls below the 3.75% lower bound specified in the prediction. The prediction required the median dot to land at 3.75–4.00% or higher; the actual projection was unchanged from December 2025 at 3.4%, implying approximately 3 cuts from the 4.25–4.50% baseline rather than ≤2. Per the stated rules, either condition alone falsifies the prediction, so criterion (1) being met is sufficient for a 'falsified' verdict regardless of the PCE outcome. The PCE revision (2.7% vs. December's 2.4%) was actually consistent with the second part of the prediction, but cannot rescue it.