Global Markets Brace for Fed Decision as US-China Trade Talks Resume
On May 8, 2025, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are scheduled to meet with Chinese officials in Geneva, marking a symbolic step toward resolving ongoing trade tensions. The talks aim to open space for negotiations on reciprocal trade policies and rebalancing economic dynamics between the two global powers.
Despite the renewed diplomatic engagement, analysts widely agree that these talks will not impact the Federal Reserve’s policy stance. The Federal Open Market Committee (FOMC) is expected to hold interest rates steady at 4.25% to 4.5%, as the Fed continues to navigate a complex environment of soft GDP data and inflationary pressure stemming from tariffs.
Financial markets remain cautious. Stock indexes have swung back and forth this week, reflecting uncertainty about future interest rate paths and the global economic outlook. While today’s meeting signals a thaw in U.S.-China relations, no immediate outcomes are anticipated that could shift the Fed’s trajectory.
Investors will be closely watching Fed Chair Jerome Powell’s statement later today for insights into the central bank’s inflation concerns, recession risks, and potential policy adjustments moving forward.