The CPI report for February to be reported in March is expected to show cooling inflation per nowcasts, but even so the FOMC may remain patient in cutting rates.
No change in interest rates is expected when the Federal Open Market Committee is scheduled to set rates again on March 19.
Uncertainty factors into the Fed's decision making in two ways: the impact that it has on the employment picture, which has been relatively stable, and inflation, which has been easing but could rise again as consumers and business leaders get spooked about the impact tariffs could have on prices.
Federal Reserve Bank of Cleveland President Beth Hammack reckons the U.S. central bank can keep steadily shrinking its balance sheet through a period of uncertain government finances, while noting she is disinclined to support an interest rate hike even if inflation pressures do not retreat quickly enough.
A new executive order gives President Donald Trump’s appointees more power over independent agencies, including how the Fed regulates banks. But monetary policy will remain under the central bank's full control.
The Federal Reserve might be forced to cut interest rates if president Donald Trump’s tariffs push inflation higher. Officials at the Fed held rates steady in January, but the new meeting minutes released on Wednesday showed some serious concerns about Trump’s latest tariff threats on cars,
Federal Reserve policymakers noted the potential for higher tariffs to contribute to inflation remaining above the central bank's 2% target rate in the minutes from their last meeting.
The market’s expectations for the Federal Reserve’s next move on interest rates held steady after the publication of minutes from the Federal Open Market Committee's January meeting. Traders are still expecting an extended pause on rate cuts with the next quarter-point reduction coming in July,
Federal Reserve Governor Michelle Bowman said on Monday she wanted increased conviction that inflation will decline further this year before lowering interest rates again, particularly given uncertainty around the impact of the Trump administration's new trade and other policies.