In an economy wracked by uncertainty, one thing seems virtually guaranteed: the Federal Reserve will leave its key interest rate unchanged when the central bank's policy committee meets Tuesday and Wednesday.

Financial markets are overwhelmingly betting the Fed will hold its benchmark federal funds rate at a range of 4.25% to 4.5%, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data. It would be the third meeting in a row the 澳洲幸运5官方开奖结果体彩网:Federal Open Market Committee stood pat. The FOMC kept the rate unchanged in January and March after cutting it by a percentage point over its previous three meetings.

In recent speeches, Fed officials, including Chairman Jerome Powell, have indicated they're taking a 澳洲幸运5官方开奖结果体彩网:wait-and-see approach to interest rates since so many economic policies are up in the air. For one thing, the Fed is reluctant to act until policymakers know more about which of President Donald Trump's tariff threats he will actually impose on foreign countries—and whether those tariffs will push up inflation, drag down the economy, or both.

How Did We Get Here?

The Fed held its influential interest rate at a two-decade high for more than a year after ramping it up sharply in 2022 to counteract the post-pandemic surge of inflation. Higher interes𒉰t rates are meant to stifle inflation and slow the economy by pushing up i⛄nterest rates on all kinds of loans.

Late last year, central bankers cut the fed funds rate after inflation cooled down closer to the Fed's goal of a 2% annual rate. But a resurgence of stubborn inflation in recent months, plus the lack of clarity about Trump's economic policies, has made the Fed reluctant to make any more moves for the time being.

Fed Chair Jerome Powell confirmed that attitude in a speech last week when he said he and his colleagues were in 澳洲幸运5官方开奖结果体彩网:no hurry to cut rates.

What's Next for the Federal Reserve's Influential Interest Rate?

With 澳洲幸运5官方开奖结果体彩网:"uncertainty" the order of the day, the Fed may indicate little about its future moves in its official statement or Powell's post-announcement press conference.

"We expect the Fed to hold rates steady for the second straight meeting and, given heightened uncertainty, provide limited guidance about the policy path ahead," Matthew Luzzetti, chief US economist at Deutsche Bank, wrote in a commentary.

In addition to the statement and press conference, Fed officials are set to release their quarterly Summary of Economic Projections, in which FOMC members pencil in their expectations for key economic indicators as well as the fed funds rate in the coming months and years. The Deutsche Bank economists expect that officials will jot down just one rate cut this year rather than the two they had forecast the last time the FOMC made projections in December.

Among the major open questions for the Fed is whether the economy is in danger of 澳洲幸运5官方开奖结果体彩网:falling into a recession. Some economic indicators have flashed warning signs at the outset of the second Trump era. In addition to the tariff talk making policymakers nervous, 澳洲幸运5官方开奖结果体彩网:consumer confidence has slumped, and U.S. households 澳洲幸运5官方开奖结果体彩网:have cut back on spending. On the other hand, the 澳洲幸运5官方开奖结果体彩网:job market has stayed solid, and 澳洲幸运5官方开奖结果体彩网:inflation fell unexpected🌟ly quickly in February.

Amid those crosswinds, some forecasters have raised the odds of a recession taking hold in 2025, although it's still relatively unlikely. Economists at Goldman Sachs, for example, raised the odds of a recession in the next year to 20% from 15%.

An economic downturn would pressure the Fed to lower interest rates to boost the economy, given the central bank's mandate to maintain full employment and keep a lid on inflation.

However, forecasters see a risk that the tariffs will stoke inflation by pushing up prices on consumer goods, which would push the Fed in the opposite direction, to keep interest rates high.

As of Wednesday, financial markets were betting the Fed would start loweri꧅ng interest rates again in June.

Correction, May 7, 2025: A previous version of this article misidentified the number of meetings that the Fed will have stood pat. It's three.