11:50 AM EDT, 03/20/2024 (MT Newswires) -- The Federal Reserve will likely be bucking the trend of other central banks if it remains hawkish after its latest decision on interest rates is announced Wednesday afternoon, Macquarie said in a report.

The European Central Bank is "conspicuously affirming" it will cut rates in June, and the Bank of England may come off dovish after its meeting on Thursday following data showing wage growth in the UK is settling down, Macquarie said Wednesday. A lower inflation report will "comfort" the Bank of Canada as the Reserve Bank of Australia's outlook has become more "dovish," the report said.

"If the Fed sounds even hawkish [Wednesday], it could place it as the 'odd man out,'" strategists Thierry Wizman, Gareth Berry, and Trang Thuy Le said.

According to the CME FedWatch Tool, there is a 99% chance that the Federal Open Market Committee will keep it fed funds rate at 5.25% to 5.5%. Some members of the panel have indicated a possible rate cut later in the year as inflation in the US has slowed its pace.

"If we look away from the Fed, other central banks and their respective 'watchers' don't seem to be too worried about a renewal of inflation in those other places anymore," the Macquarie strategists said.

They pointed to remarks earlier Wednesday by ECB President Christine Lagarde that the bank's governing councilors are set to cut rates in three months based on internal wage data.

"Cooling" UK wage growth will help the BoE "take a slightly more dovish stance than previously," and that view may be supported by data that showed inflation in the country in February rose at the slowest rate since mid-2021, the strategists said,

"The bottom line is that across the [Organization for Economic Cooperation and Development], central banks (apart from the Fed) are softening up again, or about to do so," the report said.

The strategists still expect the overall tone from the FOMC and Chair Jerome Powell as leaning "hawkish," and the tone of the FOMC will depend on how recent higher-than-anticipated inflation data fit into its data-dependent approach, Macquarie said.

"Perhaps it shouldn't be material if the Fed would be more forward-looking and less tied to the data," Macquarie said. "But because the Fed has 'made its bed' on data-dependency, the recent data becomes more material."

The Fed will make its policy decision at 2 p.m. ET Wednesday.