Fed Expected To Shift To Wait-And-See Mode

 

 

 

Fed likely to hold rates steady despite Trump call for cuts as it awaits tariff, immigration changes

by: CHRISTOPHER RUGABER, Associated Press
Posted: Jan 28, 2025 / 09:05 PM PST
Updated: Jan 28, 2025 / 09:05 PM PST

 

Time to pause? The Federal Open Market Committee is widely expected to take a breather this afternoon, the first pause since it started cutting rates in September. As a result, investors' focus will be more attuned to the Federal Reserve signaling its path ahead.

Today's decision: Policymakers are expected to wait and see how the economic data unfolds. The economy faces elevated risks as President Donald Trump rolls out his policies - particularly upcoming tariffs that stoked fears of inflation resurging. 

• The debate now appears to be whether the Fed will cut at all this year. 
• In its December dot plot, the median dot expected two more cuts this year. 

The dot plot won't be released this meeting, but Fed Chair Jerome Powell will provide some insights into the Fed's thinking.. .

Fed expected to hold steady as Trump dials up pressure

The focus will likely turn to how Fed Chair Powell handles the giant elephant in the room.

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US Fed Meeting LIVE: Powell-led FOMC to unveil first policy verdict for 2025; Wall Street eyes rate pause

30 min read . Updated: 29 Jan 2025, 11:37 PM IST

Nikita Prasad

US Fed Meeting LIVE: The US Federal Reserve has a dual mandate to act independently and keep inflation and employment in check, primarily by raising and lowering short-term interest rates. 

US Fed Meeting LIVE: Jerome Powell led FOMC will deliver its first interest rate decision for 2025 on January 29 after a two-day policy review meeting. AFP PHOTO/Karen BLEIER/FILES

US Fed Meeting LIVE: The US Federal Reserve will announce its first policy decision for 2025 after a two-day Federal Open Market Committee (FOMC) meeting today. This is the first interest rate decision of the US central bank since Donald Trump took charge as the 47th US President on January 20. 

In the December policy meeting, US Fed policymakers voted 11 to 1 to slash the benchmark interest rate by 25 basis points (bps) or (1/4) quarter of a percentage point to 4.25 - 4.50 per cent, in line with Wall Street estimates. That was the US central bank's third straight interest rate cut of 2024 and the second straight 25 bps rate cut after the November decision.

US Fed chair Jerome Powell-led rate-setting panel now envisions only one or two rate cuts in 2025 after the latest US inflation prints revealed that consumer prices still remain ‘somewhat elevated’ in the world's largest economy. 

The US Federal Reserve has a dual mandate to act independently and keep inflation and employment in check, primarily by raising and lowering short-term interest rates. 

• Experts believe that under Trump's presidency, there has been a distinct shift in the dynamics between the administration and the US Fed.

After raising the policy rate by 5.25 percentage points since March 2022 in one of the swiftest Fed reactions to combat the worst outbreak of inflation in 40 years, the central bank has held the rate on hold since July 2023 to anchor in high inflation and consistently bring it down toward the two per cent target range.

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• Trump Media to enter financial sector with Truth.Fi

  Trump Media & Technology Group (DJT, DJTWW) has announced plans to enter the financial services sector, unveiling a new division called Truth.Fi. The expansion will be backed by up to $250 million in funding from Charles Schwab (SCHW). The company plans to roll out various investment products and services through Truth.Fi in 2025. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. This post was written by Angel Smith

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Trump Media Stock Surges on Announcement of Truth.Fi Finance Platform

Aaron McDade

Wed, January 29, 2025 at 9:54 AM MST

Shares of Trump Media and Technology Group surged Wednesday morning after U.S. President Donald Trump's media company announced its first move into the world of financial services.

Trump Media (DJT), which owns Truth Social and a streaming service, said Wednesday that its board has approved a financial services strategy that includes a new product and new investments.

The company said it will launch a platform called Truth.Fi, and also invest $250 million of its roughly $700 million in assets to be handled by investment manager Charles Schwab (SCHW). 

• The funds will diversify Trump Media's assets, and be allocated to a variety of investments like exchange-traded funds or cryptocurrency, the company said.

The company plans to launch Truth.Fi sometime this year, as the company's "new agreements are consummated, funding levels are determined, and any necessary approvals by financial regulators are secured." 

• Schwab will "broadly advise" on the Truth.Fi investments that will likely be focused on American manufacturing and energy companies, Trump Media said.

In the weeks following his election victory, Trump placed his shares in the media company in a revocable trust, regulatory filings showed.

Trump Media shares were up around 8% Wednesday.

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