Bank of America: Oil price shocks may raise Fed inflation forecasts; Powell will emphasize a wait-and-see approach

Bank of America stated that the Federal Reserve will have to deal with another round of supply shocks—rising oil prices.
In the summary of economic projections (SEP) released before the March Fed meeting, overall and core inflation forecasts may be revised upward.
Bank of America reported: “If long-term growth expectations are also revised upward, we expect the median dot plot for long-term interest rates could move slightly higher.”
In this scenario, the bank believes that Fed Chair Powell may acknowledge the risk of stagflation while emphasizing a cautious stance.