#FOMCMeeting

The Federal Open Market Committee (FOMC) is set to conclude its two-day meeting on May 7, 2025, with a policy decision that will likely keep interest rates steady at 4.25%-4.50%. The market is expecting no rate cuts this time around, but investors will be closely watching Fed Chair Jerome Powell's press conference for clues on future monetary policy decisions.

*Key Discussion Points:*

- *Interest Rates*: No rate cuts are expected, but the probability of a 25 basis point move lower at the June 17-18 Fed meeting has fallen to 29.4% from 60.5% last week.

- *Tariffs and Inflation*: Powell will likely comment on President Trump's tariffs, which are expected to cause higher inflation and lower growth. Some market analysts believe the Fed will acknowledge the impact of tariffs on the economy.

- *Economic Outlook*: The FOMC statement and Powell's comments will provide insight into the Fed's view on the current economic situation and future prospects.¹

*Market Implications:*

- *Uncertainty*: The ongoing trade war and tariff policies have introduced uncertainty into the market, causing fluctuations in Treasury yields and impacting investor sentiment.

- *Rate Cuts*: Despite the current pause, some economists expect two quarter-point rate cuts by year's end due to economic and policy uncertainty.

*Investor Takeaways:*

- Investors should stay informed about FOMC decisions and economic indicators to make informed investment choices.

- The market will continue to monitor the Fed's response to emerging economic challenges, including the impact of tariffs on inflation and growth.