Analysts widely expect the central bank to maintain interest rates in the current range of 4.25% to 4.50%, despite the administration’s calls for cuts.

Economic indicators paint a mixed picture. December 2024 saw a 2.2% drop in durable goods orders, largely due to a decline in aircraft bookings. Consumer confidence also fell in January to 104.1 from 109.5 in December, signaling potential concerns about economic stability.

Inflation remains a key focus for the Fed, with the annual rate at 2.4% in November, slightly exceeding the 2% target. Meanwhile, uncertainty looms over potential tariff policies proposed by the administration, which could impact trade and inflationary trends.

Although President Trump has urged the Fed to lower rates, Chair Jerome Powell has reiterated the central bank’s independence and commitment to data-driven policy decisions. The Federal Open Market Committee is expected to proceed cautiously, balancing inflation control with economic growth.

As the Fed navigates the evolving economic and political landscape, investors and policymakers will be closely watching for signals on the future direction of monetary policy.