📅 #FOMCMeeting Update – May 6–7, 2025

The Federal Reserve is convening its policy meeting today and tomorrow, with a decision expected on May 7 at 2:00 p.m. EST, followed by Chair Jerome Powell’s press conference at 2:30 p.m. EST .

🔹 Interest Rates: The Fed is widely anticipated to maintain the federal funds rate at 4.25%–4.50%, a range held since December 2024. Market expectations for a rate cut in June have decreased to 32%, down from 66%, with an 80% chance projected for July .

🔹 Economic Indicators: April's robust jobs report showed a gain of 177,000 jobs, though previous months' figures were revised downward. Alternative indicators, such as ADP’s estimate of 62,000 jobs and the Fed's Beige Book, suggest labor market softness .

🔹 Inflation and Tariffs: Inflation remains subdued, but concerns persist over the inflationary effects of new tariffs proposed by President Trump. However, tariffs above 10% have been delayed for 90 days, potentially easing immediate inflationary pressures .

🔹 Fed's Stance: Chair Powell emphasizes the importance of comprehensive policy evaluation—including tariffs, fiscal, immigration, and regulatory policies—before adjusting rates. This suggests no imminent policy changes pending clearer data .

🔹 Market Impact: The S&P 500 has declined by 0.4% amid uncertainty about Fed policy and underlying economic trends exacerbated by broader policy shifts .

Stay tuned for the Fed's announcement tomorrow, which will provide further insights into the central bank's assessment of the economy and future policy direction.

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