Monetary policy

Get expert analysis of the May FOMC meeting, inflation outlook, and Powell's comments.

With no policy changes expected, analysts are eagerly awaiting the new Summary of Economic Projections for clues about future monetary policy.

Federal Reserve Chair Jerome Powell emphasized the need for patience amid uncertainty over the Trump administration's policies, saying there would be no immediate rate changes but that the Fed would proceed carefully.

Mike Goosay, Chief Investment Officer of Global Fixed Income at Principal Asset Management, breaks down the Federal Open Market Committee meeting, Chair Powell's press conference and the SEP.

Muni yields were bumped one to eight basis points, depending on the scale, while UST yields fell three to 10 basis points, with the greatest gains out long.

"There are a lot of moving parts here with the potential to either help or hinder the Fed's quest for price stability and maximum employment" this year, noted BMO Deputy Chief Economist Michael Gregory, who says the Fed will "stand pat."

The Federal Open Market Committee cut the fed funds target again in December but signaled fewer cuts in 2025. There was some dissent. The markets are watching to see if the Federal Reserve pauses its easing cycle in January. Brian Rehling, head of global fixed-income strategy at Wells Fargo Investment Institute, recaps and parses the previous day's FOMC meeting and Fed Chair Jerome Powell's press conference.

Analysts are unsure what the Federal Open Market Committee will do with monetary policy in 2025. The panel projects two rate cuts, but some analysts expect more, and others see fewer.

A week ahead of inauguration day, Scott Colbert, executive vice president, director of fixed income and chief economist at Commerce Trust, takes a look at how the Federal Reserve and the economy will fare in President-elect Donald Trump's second run in the White House.

Analysts are confident the Fed will lower rates at this week's meeting, but their views on what next year holds don't share the same consensus.