Following the Fed’s decision to keep interest rates unchanged, market focus has already shifted to the next meeting.
Market forecasts indicate that investors do not expect significant changes at the April meeting.
According to Polymarket data, the probability of interest rates remaining unchanged at their current range of 3.50%–3.75% at the Federal Open Market Committee (FOMC) meeting on April 29 is priced at 94%. In contrast, a 25 basis point rate cut is only 4% likely, while a more aggressive 50 basis point cut is considered a very low probability at 1%. The probability of a rate increase remains at 2%.
This outlook suggests that the market believes the Fed will maintain a “wait-and-see” approach in the short term. In particular, recent rises in energy prices, geopolitical risks in the Middle East, and uncertainties regarding the inflation outlook limit the likelihood of a rapid change in monetary policy.
The Fed, in line with expectations, kept its policy interest rate unchanged for the second consecutive meeting. Following the decision, attention turned to Fed Chairman Jerome Powell’s press conference. Powell is expected to address updates on the inflation and employment outlook, as well as topics such as escalating tensions with Iran, trade policies, political pressures, and the impact of artificial intelligence on the labor market.
*This is not investment advice.