The Federal Reserve Meeting Starts Today—Here's What You Need to Know

Core Insights - The Federal Reserve is expected to pause interest rate cuts during its upcoming meeting, with analysts looking for indications of potential future cuts later in the year [1][7] - The Fed has previously lowered interest rates three times in late 2025 to support a weakening job market, but the labor market is now stabilizing, supported by strong consumer spending [1][5] Interest Rate Outlook - Markets anticipate a delay in any potential interest rate cuts for 2026, with Fed Chair Jerome Powell's press conference being a focal point for validation of these expectations [2][4] - Powell is not expected to provide significant new information regarding the Fed's rate plans, but may hint at the possibility of future cuts without specifying a timeline [3][4] Economic Indicators - The Fed's actions influence a variety of interest rates, including those on credit cards and certificates of deposit, with the current federal funds rate set between 3.5% to 3.75% [4] - Recent economic data has shown a slight tilt towards hawkish sentiment within the Fed, with employment growth remaining sluggish and an unemployment rate of 4.4% [5] - Despite a government shutdown last year, real consumer spending growth was unaffected, leading to increased GDP projections following a rise in retail sales before the holidays [6]