The Federal Reserve is likely to keep interest rates steady. After three cuts last year, current levels are enough to keep inflation in check without stalling growth. Inflation is still above 2%, unemployment sits near 4.4%, and the economy hasn’t collapsed — so there’s no urgent push for action.
Jerome Powell’s message will be clear: patient, data-driven, and cautious. Rate cuts aren’t ruled out, but the bar for them is higher — the Fed wants sustained signs that inflation is cooling or that the labor market is weakening before moving. Acting too soon could spark higher yields, a weaker dollar, and rising inflation expectations.
“No cuts” doesn’t mean “no tightening.” Even with rates steady, real rates gradually rise as inflation eases. Powell will also stress the Fed’s independence — decisions are economic, not political — reinforcing market confidence.
For markets: don’t expect a liquidity boost. Equities may see minor swings, bonds aren’t likely to fall, the dollar stays firm, and crypto won’t get a cheap-money push. This meeting is all about patience — a reminder that easy liquidity isn’t back yet.