Federal Reserve officials concur that uncertainty is prevalent. However, central bankers prioritize economic data. It remains unclear how the US economy will respond to President Donald Trump’s policies, but currently, there is no urgent need for the Fed to provide relief via another rate cut. Inflation’s slowdown has stalled, supporting the Fed’s decision to hold off on rate cuts.
Fed Chair Jerome Powell stated earlier this month, “The costs of being cautious are very, very low. The economy is fine, it doesn’t need us to do anything, really, and so we can wait and we should wait.” Most Fed officials suggest monetary policy is in a good place, with rates moving accordingly based on data.
Investors expect steady rates until summer, with June’s meeting having the highest likelihood of a quarter-point cut. US stocks opened higher as investors await the Fed’s decision. The Dow opened higher by 0.3%, the S&P 500 by 0.4%, and the Nasdaq Composite by 0.6%. Investors are keen to resume the brief rally, but US stocks have been volatile due to uncertainty about Trump’s tariffs.
Investors expect steady rates and will focus on remarks from Powell and the Summary of Economic Projections. Wall Street will look for changes in the Fed’s 2025 outlook due to market turmoil caused by Trump’s tariff announcements. The dot plot, set to be released at 2 pm ET, will reveal expected rate cuts this year and beyond. However, these projections could change as economic conditions evolve. — news from CNN
