#FOMCMeeting The Federal Open Market Committee (FOMC) commenced its two-day policy meeting today, May 6, 2025, with the decision on interest rates scheduled for release tomorrow, May 7, at 2:00 p.m. EST. Federal Reserve Chair Jerome Powell will hold a press conference at 2:30 p.m. EST to discuss the committee's decision and economic outlook.

Key Expectations

Markets widely anticipate that the Fed will maintain the federal funds rate at its current range of 4.25% to 4.5%. This expectation is supported by the CME Group’s FedWatch tool, which indicates a 99% probability of no rate change. Despite a 0.3% GDP contraction in Q1 and rising jobless claims, inflation remains elevated, with both headline and core Personal Consumption Expenditures (PCE) measures showing higher-than-expected annual increases in March.

President Trump's recent implementation of aggressive tariffs has introduced additional inflationary pressures and raised concerns over weaker economic growth. While some experts advocate for rate cuts to counteract these effects, the Fed appears inclined to adopt a wait-and-see approach, monitoring how these tariffs impact the labor market and global supply chains before making further policy adjustments.

Visual Insight

*Federal Reserve Chair Jerome Powell announces that interest rates will remain unchanged during a news conference at the Federal Reserve's headquarters. *

Stay tuned for the official announcement and Chair Powell's press conference tomorrow for more detailed insights into the Fed's policy direction.