The Federal Reserve will hold its meeting amid increasing pressure from the U.S. administration and global conflicts like the Israel-Iran war. However, no changes to interest rates are anticipated this month.
Investor Insights on Future Rate Changes
The main focus of the meeting will be the dot plot, where Fed members will submit their interest rate forecasts. In March, two rate cuts were projected this year, but changes in member votes could affect market expectations significantly.
Trump's Pressure and Geopolitical Risks
The Israel-Iran conflict raises uncertainty regarding oil supply and inflation. President Trump is openly demanding interest rate cuts, adding to the Fed's pressure. Nonetheless, Powell is expected to reiterate that the Fed is not in a hurry to act.
Powell's Approach and Long-term Outlook
Powell is likely to maintain a cautious stance considering his term ends in May 2026. Historically, Fed chairs often end their terms on a hawkish note, preserving credibility and independence in tackling inflation. The current economic indicators suggest the Fed may not have urgent reasons to act.
Despite external pressures from political demands and geopolitical crises, the Fed is likely to maintain a steady policy in the coming months, while closely monitoring evolving economic indicators.
