Fed Decision Day: Will Powell’s Team Abandon Their Two-Cut Forecast?

The Federal Reserve is expected to hold interest rates steady at their current 4.25%-4.5% range during Wednesday’s meeting, but may revise their economic outlook and future rate cut projections.

Amid uncertainty from President Trump’s trade and fiscal policies, Fed officials led by Chair Powell have emphasized patience, insisting “there is no need to be in a hurry.”

Markets will focus on the quarterly projections and “dot plot” showing individual members’ rate intentions, with some economists predicting the Fed may reduce their previous forecast of two rate cuts for 2025 due to inflation concerns from tariffs.

While markets are currently pricing in two to three cuts beginning in June, some analysts believe this outlook may be too optimistic given the current economic environment.