#FOMCMeeting **#FOMCMeeting Update: Fed Holds Rates Steady Amid Tariff Uncertainty**

The Federal Reserve’s May 6–7 meeting is underway, with markets widely expecting **no change to interest rates** (currently 4.25%–4.5%). However, all eyes are on signals for a potential rate cut in June as economic uncertainty mounts. Here’s what you need to know:

1️⃣ **Rate Outlook**

- **No May Cut**: Policymakers are likely to hold rates steady, citing robust labor data and inflation still above the 2% target (core PCE at 2.6% as of March).

- **June in Focus**: Markets anticipate a possible 0.25% cut in June, with two reductions projected for 2025, bringing rates to ~3.75%–4% by year-end.

2️⃣ **Economic Crosscurrents**

- **Tariff Risks**: Recent U.S. tariffs and retaliatory measures are clouding the outlook. The Fed acknowledges their inflationary impact but remains cautious about acting prematurely.

- **Growth Slowdown**: Q1 2025 saw a contraction (-0.4% GDP), driven by volatile trade dynamics, though unemployment remains stable at 4.1%.

3️⃣ **Political Pressure**

President Trump has intensified criticism of the Fed, urging faster rate cuts to counter tariff-induced economic headwinds. However, Chair Powell has emphasized the Fed’s independence, stating that policy decisions will remain data-driven.