The next Fed meeting is in May and will they decide to decrease interest rates again?
The Fed has seven meetings scheduled in 2025 with the next one scheduled on May 7. It is currently not likely the Fed will issue a cut in interest rates, so we will likely remain at the current level of 4.25% in the short term. However, we could see the Fed make a cut in June 18 or the July 30 meeting, or possibly later in the year after there is more economic data available since the Trump Administration took office January 20.
Jerome Powell has confirmed that interest rates will decrease in 2025, it’s just a matter of when that might occur. February 11, Powell stated in a Senate testimony, “With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. We know that reducing policy restraint too fast or too much could hinder progress on inflation.”
Additionally relating to interest rates, Fed Governor Christopher Waller said in a speech on February 18, “Waiting for economic uncertainty to dissipate is a recipe for policy paralysis.” Much of these decisions will be based upon a close watch on the jobs market and whether consumer spending softens or begins to gain momentum. Even though consumer confidence is registering higher at this point, that more positive outlook as not yet transferred to money being spent.
After the July 30 meeting, the final three Fed meetings of the year are September 17, October 29, and December 10.