The upcoming Federal Reserve meeting on May 7-8 is drawing attention as market participants await the status of interest rates. Jerome Powell will address key economic factors during the press conference.
Fed Rate Expectations
According to the CME Group's FedWatch tool, there is a 97% probability that the Fed will maintain its target rate between 4.25% and 4.50%. The Fed has not adjusted its rates since December after three cuts earlier in 2024.
Economic Situation in the US
First-quarter GDP data revealed a 0.3% contraction. However, April saw a nonfarm payroll increase of 177,000, which could influence the rate decision. Economist Erik Weisman noted that the unstable tariff policy creates uncertainty in the macroeconomic landscape.
Pressure on the Fed from Trump
President Donald Trump is actively urging the Fed to lower interest rates, but the odds of this happening at the current meeting are low. Economists like Ryan Sweet suggest rates will remain steady until December, while analysts consider potential stagflation risks.
Jerome Powell's upcoming remarks will be an important indicator for investors and policymakers regarding the Fed's next steps amid a changing economy and pressure from the presidential administration.
