Private sector activity is slowing as policy uncertainty remains elevated, while stocks have pulled back notably, he said.
GDP growth is also likely to stall in the first quarter in part due to weaker consumer spending.
"Powell may find it difficult to reaffirm that the economy is 'holding up just fine,' and that it 'doesn't need us to do anything,'" Daco added in a note.
Looking ahead, he warned that the Fed's policy stance could shift rapidly with economic conditions.
"A reactionary monetary policy stance means policy direction could rapidly turn more dovish on weaker economic and labor market data, just like it could turn hawkish with hotter inflation readings," he said.