#FOMCMeeting

🏦 What to Expect

No rate change anticipated: The Fed is expected to leave interest rates unchanged at 4.25%–4.50%. Both market consensus and expert commentary strongly lean towards a hold until at least September, with futures pricing in a likely first cut in September/December .

Cautious “wait-and-see” tone: In a backdrop of mixed data—labor remains steady (~4.2% unemployment), inflation hovering near target, but with mounting risks from tariffs and geopolitical tensions—the Fed is expected to emphasize data dependency. The Summary of Economic Projections (“dot plot”) may show fewer cuts planned for 2025 .

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Key Risks on the Fed’s Radar

Geopolitical uncertainty & oil prices: Middle East developments (Israel–Iran tensions) have created volatility in oil markets and inflation expectations—adding to caution .

Trade and tariffs: The impact of new tariffs—promoted by President Trump—is still unfolding, fuelling inflation worries and prompting the Fed to stay on hold and preserve policy flexibility .

Political pressure: Trump’s demand for steep rate cuts could risk compromising Fed independence. Officials are likely to reiterate their commitment to non-political, data-driven decision-making .

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What to Watch for Wednesday/Thursday

1. Policy statement & dot plot – Look for revisions to the Fed’s 2025 outlook and timing for rate cuts.

2. Chair Powell’s press conference – Verbatim wording around inflation, tariffs, and the economic outlook will be critical.

3. Economic signals – Investors will be paying close attention to dovish/hawkish cues; markets are already pricing in ~50 bps of cuts by year‑end .

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Why It Matters

The FOMC’s decision will set the tone for the rest of the year. If the Fed signals a slower path for cuts, it could dampen markets and strengthen the dollar. Conversely, forward guidance hinting at cuts could boost equities and risk appetite.