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The Federal Reserve will more than likely hold interest rates steady at its May 7-8 policy meeting. Still, all eyes are on Chair Jerome Powell’s comments on the state of the America market, inflation, and the possibility of a recession. Powell will address the press on the Fed’s interest rate decision at 2 PM ET Wednesday. Markets have nearly ruled out any changes to the federal funds rate this week. The CME Group’s FedWatch tool assigns a 97% probability that the central bank will maintain its current target range of 4.25% to 4.50%. After making three cuts in 2024, the central bank has not touched the rate since last December. Investors, economists, and policymakers are waiting for Powell’s remarks in the post-meeting press conference to get clues about how the Fed will help America’s economy. No change expected, but all eyes on Powell According to the first-quarter GDP data released last week, there was a 0.3% contraction in real economic growth, which was not much of a surprise to economists who expected US President Donald Trump’s policies to bring down spending. Yet, April saw a 177,000 nonfarm payroll employment increase that could have given Powell and central bankers more reason to maintain borrowing rates.  “The chaos of U.S. tariff policy leaves the future macroeconomic landscape especially challenging to discern,” said Erik Weisman, chief economist at MFS Investment Management. Powell, he added, is almost certain to maintain a cautious “wait-and-see” stance. This week’s meeting will be Powell’s first major public appearance since new tariffs introduced by the Trump administration began taking effect. The US president slapped a 145% duty on certain Chinese imports ignoring the cries of retailers who believe the cost of these taxes will be passed on to American consumers. Several analysts like Torsten Slok, chief economist at Apollo,…

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Filed under: News - @ May 7, 2025 11:29 am