Fed expected to keep rates unchanged as Chair Powell pivots back to economics
The Federal Reserve is expected to pause rate cuts after three reductions; Jerome Powell's comments on inflation and Trump's housing policies may influence markets, CME FedWatch shows 96% chance of hold.
- On Wednesday, Federal Reserve Chair Jerome Powell will face markets as the Federal Reserve is expected to hold rates after three quarter-point cuts last year, with CME's FedWatch futures pricing a 96% chance of a hold at 3.5%-3.75%.
- Earlier this month, the U.S. Department of Justice subpoenaed the Fed in a probe tied to Powell's testimony about a $2.5 billion building renovation, and Powell said Jan. 11 the subpoenas were `pretexts` to punish the Fed.
- President Trump recently told aides to buy $200 billion in mortgage bonds and issued an executive order limiting large institutional investors, which could front-load demand and boost housing inflation, though Allianz Investment Management said the impact may be limited.
- A hawkish pause would flag lingering inflation risks, denting rate-cut bets and pressuring risk assets lower, potentially lifting the U.S. dollar against low-yield currencies.
- Stephen Miran, Trump's Fed appointee, is expected to dissent for a 50-basis-point cut, and many economists expect growth could pick up in the coming months, reducing calls for easing.
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Fed expected to keep rates unchanged as Chair Powell pivots back to economics
After two weeks of intense political and legal scrutiny, the Federal Reserve will seek to make this week’s meeting about interest rates as straightforward and uneventful as possible, though President Donald Trump probably still won’t like the result.
Fed Rate Cuts On Hold Till June, According To Market Forecasts | The Capital SpectatorThe Brinsmere Funds Ad
The Federal Reserve is expected to leave its target rate unchanged at tomorrow’s policy meeting, marking a shift after three straight cuts in 2025. Keeping rates steady is the current outlook until June, but several factors are in play that could change the calculus in the weeks ahead. Let’s start with what appears likely: the Fed funds futures market is pricing in a high probability that the central bank will keep its target rate steady at a 3.…
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