Fed Expected to Maintain Rates Amid Market Rebound

The upcoming Federal Reserve meeting is expected to keep interest rates on hold, but investors and markets are closely watching for signals of possible rate cuts in the coming months. Market sentiment has rebounded following volatility triggered by President Trump's tariffs, with stocks nearly erasing earlier losses. The Fed is seen as the primary tool for supporting market activity, and a dovish tone from Chair Jerome Powell—suggesting diminished inflation concerns—would likely be welcomed by investors. Despite a first-quarter economic contraction, many analysts attribute the weakness to pre-tariff import surges rather than underlying economic deterioration. Futures markets currently anticipate multiple rate cuts by the end of the year, though recent strong job data and political pressure from the White House have influenced expectations. Central bank officials remain cautious, weighing the risk of an economic downturn against concerns that tariffs could fuel inflation.