Uneasy optimism kept major equity indexes slightly above the breakeven point leading up to the Federal Open Market Committee’s monetary policy statement and Fed Chair Jerome Powell’s press conference.
On Tuesday morning, President Donald Trump addressed reporters at the White House, expressing a desire to avoid escalating tensions between Israel and Iran while reaffirming his commitment to dismantling Iran’s nuclear capabilities.
When asked whether the U.S. would target Iran’s nuclear facilities, Trump did not provide a definitive answer. “I may do it,” he commented. “I may not do it. Nobody knows what I’m going to do.”
Trump also noted that “nothing’s too late” when questioned if the opportunity for negotiations had passed.
This afternoon, the central bank announced what was anticipated: it would keep the federal funds rate target range steady at 4.25% to 4.50%, a decision that led to stable post-announcement market reactions.
The Federal Open Market Committee (FOMC) acknowledged that volatility in net exports had influenced the economic data but stated that current indicators indicate that economic activity is still expanding at a solid rate.
While unemployment rates remain low and the job market appears robust, the Fed noted that inflation is “somewhat elevated.” Their economic projection summary, or “dot plot,” indicates two rate cuts expected in 2025. Chair Powell emphasized that the Fed would continue monitoring incoming data amid uncertainties related to the administration’s tariff policies.
