Investors are looking forward to the release of the US Fed FOMC meeting minutes on Wednesday, which will provide insight into US Fed officials’ assessment of economic conditions and interest rate policy. Global investors closely track the US Federal Reserve’s monetary policy choices, which have a considerable impact on liquidity in stock, bond, and other financial markets.
The Federal Open Market Committee’s last monetary policy meeting was held on May 6-7, 2025, where the interest rates were kept unchanged at 4.25% to 4.5%.
Today, on Wednesday, the minutes of the FOMC meeting held on May 6-7 will be released at 2 pm ET.
Powell in his press conference on May 7 Powell communicated his view following the rate decision that the effects of tariffs are still highly uncertain, but that if they remain high, the risks of higher inflation and unemployment will increase.
With inflation just above their 2% objective, the Fed believes the economy is expanding at a moderate rate. The Fed did admit, though, that trade policy has contributed to the rise in the risks of greater unemployment and inflation since their most recent meeting in March.
A slowdown in the US economy is further predicted as an outcome of the Trump tariffs. Currently, the base tariff of 10% exists, but the reciprocal tariffs have been paused till July 9.
The negotiations on Trump tariffs are underway between the US and other trading partners. The tariffs against the EU have been paused till July 9.
Markets expect the Fed to lower interest rates in the second half of the year, but uncertainty remains elevated. The US Fed also faces a trade-off as keeping rates high could cause a more severe slump in the economy, while lowering rates could increase inflation.
Fresh economic forecasts, as a summary of economic projections, are scheduled to be released on June 17-18 in the FOMC meeting. Before that, the May 2025 CPI data are scheduled to be released on June 11, 2025.
Last week, US markets felt the heat from the US budgetary outlook and trade tensions, which weighed significantly on investor mood. The US stock market is under pressure as bond yields increase. The 30-year Treasury bond rate surged beyond 5%, while the 10-year yield was also above 4.5%. Although both have come down this week. Stock market investors are anxious that the rise in yields may lead to a sell-off in US stocks.
This week, investors will also be watching the first-quarter GDP updates, the most recent information on the U.S. trade balance, and retail inventories, in addition to Friday’s personal consumption expenditures inflation report. Surveys of consumer sentiment and confidence will also be the main emphasis. Nvidia’s first-quarter earnings are slated to be released today after the market closes.