Fed Expected to keep the rates steady at the FOMC meeting even when Trump rings up for pressure

Investors do not expect many surprises at the end of the Federal Reserve’s Wednesday FOMC policy meeting, where the central bank’s officials are largely expected to have interest rates stable after three consecutive cuts at the end of 2024.

There is significantly more uncertainty about how Fed -Chairman Jerome Powell will use his afternoon press conference to tackle the new elephant in space: the effect Donald Trump could have on the future path to monetary policy.

The US president threatens to impose on Mexico, Canada and China as early as this Saturday, an attitude that some economists predict will put upward pressure on inflation at a time when the central bank is trying to ensure that this question is finally under control.

What makes things more complicated is that Trump makes it clear that he wants decision makers to reduce rates further. He hinted last week in an upcoming clash with Powell on this topic and said he wants the rates to come down “very” and that he expects to speak directly with the bold chair “at the right time.”

JPMorgan Chief Economist Michael Feroli expects Powell to adopt a “duck and cover” approach at his press conference after the bold meeting.

Read more: What bold rate -decision means for bank accounts, CDs, loans and credit cards

Feroli said he expects Powell to indicate that every fat member is using his own conditioning assumptions about what trade policies are ultimately adopted while it makes it clear that “the only thing that was decided at the meeting was the monetary policy statement “released by Fed’s rate -seting committee.

In December, officials changed languages ​​in their political statement to say that Fed would consider the “scope and timing” of further adjustments to the rates based on the data and changing views showing a less committed form than earlier in their campaign in the 2024 rate. .

At that December meeting, almost all of the Federal Reserve officials agreed that “upward risks to the inflation prospects had risen” partially due to the “probable effects” of expected changes in trade and immigration policy, according to minutes from this meeting. Some officials had begun to work on these assumptions in their views on the policy.

In recent weeks, many bold officials have made it clear that they are in rising four.

The latest reading of inflation for the month of December, measured by the Consumer Price Index (CPI), showed small progress after three months of attitude stable.

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