Today, the US Fed’s Federal Open Market Committee (FOMC) is set to announce its monetary policy decisions for the first time in 2025. All eyes will be on Fed chief Powell’s press conference and how he takes up questions from the media particularly after Trump regaining control of the White House.
The FOMC meeting is held over two days (January 28–29), and will conclude with Fed Chair Jerome Powell announcing the decision at 2 p.m. ET today or 12.30 a.m. IST, Thursday.
Live streaming of the FOMC meeting announcement will be available at the US Fed’s official Youtube channel – https://www.youtube.com/federalreserve and https://www.federalreserve.gov/live-broadcast.htm
The Federal Reserve is expected to keep interest rates unchanged in the January FOMC meeting on Wednesday. President Trump has called for an immediate interest rate cut, but the Federal Reserve may delay further cuts due to inflation concerns. Powell’s press conference is expected to provide insights into interest rate direction.
The Fed began reducing interest rates in late 2024, with a 50 basis point cut in September and subsequent cuts in November and December. Future cuts may total 50 basis points, but future reductions depend on economic slowdown and lower inflation.
Although it is anticipated that President Trump’s low tax policies will boost economic activity, his trade tariffs and immigration restrictions may cause inflation to rise and delay future rate reduction. Since inflation is still high and the economy is doing well right now, there is less need for a large rate reduction. Future Fed decisions may also be influenced by the declining labor market and upcoming changes to non-farm payroll data.
The next set of inflation data for January 2025 are scheduled to be released on February 12, 2025, at 8:30 A.M. Eastern Time. It remains to be seen how the markets respond going forward as new AI firms like DeepSeek challenge the might of Nvidia and others. Inflation, rate cuts, and AI will remain the focus areas for investors from here on.