The Fed Will Almost Certainly Hold At Its Meeting Next Week-Here's What's Still Up In The Air

Group 1 - The Federal Reserve is expected to maintain its key interest rate in the range of 3.5% to 3.75% during the upcoming policy meeting, marking the second consecutive meeting without a rate change after previous cuts in 2025 [1][2] - The ongoing Iran war is influencing the Fed's decision-making, particularly concerning inflation and economic growth projections, with rising gas prices raising concerns about broader inflationary pressures [1][2] - Financial markets are pricing in a greater than 99% probability that the Fed will keep rates unchanged, reflecting a shift in expectations for potential rate cuts later in the year [1][2] Group 2 - The Fed's economic projections are anticipated to show upward revisions to both headline and core PCE inflation for the current year, acknowledging the short-term inflationary impact of the Iran conflict [1] - There is increasing political pressure on the Fed, particularly from President Trump, who has called for immediate rate cuts, which the Fed has resisted due to inflation concerns [1] - The potential appointment of Kevin Warsh as the new Fed chair could influence future rate decisions, although his confirmation is subject to Senate approval and may face opposition [1]