#FOMCMeeting The Federal Reserve's Federal Open Market Committee (FOMC) is convening its two-day policy meeting today and tomorrow, May 6–7, 2025. Markets widely anticipate that the Fed will maintain its benchmark interest rate at the current range of 4.25% to 4.50%, a level held steady since December 2024.

Key Developments Ahead of the Meeting

Economic Outlook: Recent data presents a mixed picture. While GDP contracted by 0.3% last quarter, the labor market remains resilient, with 177,000 jobs added in April. However, new tariffs introduced by President Trump have disrupted business sentiment and manufacturing activity, raising concerns about potential stagflation.

Inflation and Employment: The Fed faces a policy dilemma as tariffs may simultaneously drive up prices and suppress employment, challenging its dual mandate of price stability and maximum employment.

Market Expectations: Investors are closely watching for any signals from Fed Chair Jerome Powell during his post-meeting press conference. While immediate rate cuts are unlikely, markets are pricing in potential reductions starting in July or December, contingent on further economic data.