Introduction to the Federal Reserve
The question of when the next Federal Reserve meeting will take place has been weighing heavily on the minds of anxious investors. This is due to the worst bout of inflation to hit the U.S. economy in 40 years, which was nearly back down to the central bank’s long-term target before trade uncertainty raised the threat of rising prices again.
Understanding the Federal Reserve’s Role
The Federal Reserve, led by its rate-setting committee, the Federal Open Market Committee (FOMC), plays a crucial role in managing the country’s economy. The FOMC meets eight times a year, with each meeting lasting two days and concluding with a policy decision that is released at 2 pm Eastern time. Following the policy decision, the Fed chief holds a press conference at 2:30 pm.
Recent Actions by the Federal Reserve
In September 2024, the Federal Reserve brought borrowing costs down from a 23-year high by slashing interest rates by a surprising half-percentage point. This move was followed by 25 basis points (bps) cuts in November and December, resulting in a target range of 4.25% to 4.50% for the short-term federal funds rate.
The Impact of Trade Policies on Inflation
The change in the political landscape complicates the central bank’s calculus, as inflationary pressures could resurface due to President Donald Trump’s tariff policies. According to Steve Dean, chief investment officer at Compound Planning, businesses can respond to tariff increases by raising prices or absorbing the added costs, likely resulting in a mix of both.
The Dual Mandate of the Federal Reserve
The Federal Reserve has a dual mandate: to achieve stable prices and maximum employment. While the labor market remains healthy, with job growth slowing, the question now is what the Fed will do in the future.
Expert Insights on Future Interest Rate Cuts
Steve Rick, chief economist at TruStage, notes that it is too soon to make a meaningful decision around interest rate cuts due to the lack of clarity in the economic landscape. As a result, the Fed is not expected to make significant moves until there is a clearer picture.
The Next Fed Meeting: What to Expect
The next Federal Reserve meeting will begin on Tuesday, July 29, and conclude with a policy statement on Wednesday, July 30, at 2 pm Eastern. As of July 22, interest rate traders assigned a 95% probability to the FOMC keeping the short-term federal funds rate at a target range of 4.25% to 4.50%.
The 2025 Fed Meeting Calendar
The FOMC meeting calendar is available on the Federal Reserve’s website and shows the scheduled meetings for 2025:
- January 28 to 29
- March 18 to 19
- May 6 to 7
- June 17 to 18
- July 29 to 30
- September 16 to 17
- October 28 to 29
- December 9 to 10
Conclusion
In conclusion, the Federal Reserve plays a vital role in managing the U.S. economy, and its meetings are closely watched by investors and market participants. With the current economic landscape and trade policies, the Fed’s decisions on interest rates will have a significant impact on the economy. As the next Fed meeting approaches, it is essential to stay informed about the potential outcomes and their effects on the economy.
