Federal Reserve Chair Jerome Powell signaled a cautious approach, emphasizing the current 3.5-3.75% rate is appropriate amid economic resilience and inflation concerns. His remarks have slashed market expectations for a rate cut by June 2026, with YES odds dropping from 6% to 4.5%.
Powell stressed data dependence and noted geopolitical tensions and energy price volatility, reinforcing the Fed's steady policy stance through 2026. Analysts see this as a clear signal that rate cuts are not imminent.
Upcoming CPI data and employment reports will be key indicators, alongside Middle East developments and shifts in Fed language.