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Fed's Upcoming Meeting: No Surprises Expected

Coin WorldWednesday, Jan 29, 2025 8:20 am ET

1min read

The Federal Reserve's upcoming meeting has sparked anticipation among market participants and analysts alike. As the central bank prepares to convene, many are speculating on the potential outcomes and their impact on the broader economy. However, a consensus has emerged among analysts that the meeting is unlikely to rattle market expectations.

Institutional investors and analysts have been sharing their perspectives on the Federal Reserve's rate decision. Standard Chartered Bank, for instance, expects the Fed to maintain its current stance and adopt a wait-and-see approach. The bank believes that Fed Chair Jerome Powell will not want the Federal Open Market Committee (FOMC) to take a more hawkish stance at this stage.

SEB Nordic Bank shares a similar view, anticipating that the Fed will keep rates unchanged. The bank expects two rate cuts in May and September 2025, pending more data and clarity on President Trump's policies. PIMCO, on the other hand, suggests that the Fed may keep rates unchanged "for the foreseeable future" and could even raise borrowing costs, as officials await clarity on Trump's policies.

Goldman Sachs predicts that this meeting will not provide much new information and is unlikely to offer forward guidance for March policy action. The bank expects rate cuts of 25 basis points in June and September this year. Bank of America also anticipates that the Fed will keep rates unchanged, with Powell maintaining maximum flexibility for the March policy decision.

JPMorgan Chase expects the Fed to keep rates unchanged, not ruling out the possibility of action at the March meeting. The bank is watching how the Fed incorporates Trump's policies into its deliberations. Ernst & Young, meanwhile, suggests that data shows a robust economy, with inflation proving more stubborn than expected. The firm expects the Fed to hold off on rate cuts this week, preserving more options to further adjust the federal funds rate later this year.

Despite the varied opinions, a common theme among analysts is the expectation that the Fed will maintain its current stance. This suggests that the market should not anticipate any significant surprises or shifts in policy from the upcoming meeting. As such, market expectations are likely to remain relatively stable, barring any unforeseen developments.

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