Investors are closely monitoring Powell’s post-meeting press conference, which will be his first public interaction since receiving grand jury subpoenas linked to a Department of Justice probe. The legal scrutiny has intensified speculation over Powell’s intentions after his tenure as chair ends in May.
The Fed’s statement is due at 2 p.m. ET, with Powell addressing reporters at 2:30 p.m. Analysts expect the announcement to reaffirm the hold on rates, while signaling potential cuts later in the year, likely in July. “There’s really no convincing argument that the Fed needs to really do anything here,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities.
Political Tensions and Market Reactions
The political landscape surrounding the Fed remains tense. President Donald Trump has repeatedly urged rate cuts, while several lawmakers have criticized the subpoenas as an attack on the Fed’s independence. Market participants are also factoring in the upcoming U.S. elections and potential policy shifts.
Wall Street analysts note that recent economic data, including a moderation in core inflation at 2.6% and stable labor-market indicators, support the Fed’s cautious stance. Unemployment has slightly decreased from a four-year high of 4.5% in November, reducing the urgency for immediate policy action.
Looking Ahead
Despite internal alignment on holding rates, external pressures remain significant. Powell’s comments will be analyzed for insights on the Fed’s strategy toward employment and inflation. Economists warn that “unusual times” could complicate decision-making, with political and legal developments influencing the central bank’s future moves.
