Fed Rate Cut in Focus Amid Jerome Powell’s Farewell FOMC Meeting

Key Insights:

• As the FOMC meeting nears, the crypto industry is watching Fed rate cut decisions.
• The Fed is expected to hold rates for the third straight meeting.
• Powell’s final FOMC adds weight to policy signals.

The upcoming Federal Reserve meeting could mark the end of an era, with Jerome Powell expected to chair what may be his final FOMC session. While the Fed rate cut decisions remain uncertain, many believe the central bank will hold rates steady.

The upcoming FOMC meeting is also noteworthy, considering the potential leadership transition. With expectations of limited rate cuts ahead, investors are closely watching for any signals that could shape the Fed’s policy decisions.

FOMC Meeting in Focus: Fed Rate Cut or Continued Pause?

As a new week approaches, all eyes are on the Federal Reserve’s potential FOMC meeting on Wednesday. While the Fed held the interest rates steady at 3.5%–3.75% for two consecutive meetings, the industry is awaiting the next meeting.

This FOMC meeting is attracting more attention for two major reasons. The crypto industry is mainly awaiting the meeting to learn about the upcoming Fed rate-cut moves. In addition, the day is special because it could be the last possible FOMC session under Chair Jerome Powell.

No Fed Rate Cut for Now

Notably, the Federal Reserve is widely expected to keep interest rates unchanged at the next FOMC meeting for the third consecutive time. According to the CME FedWatch tool, markets are pricing in almost no chance of a near-term Fed rate cut.

This suggests that policymakers are likely to remain cautious for now. Deutsche Bank Chief Economist Matthew Luzzetti stated – We expect Powell’s overall tone will be consistent with a Fed that expects to be on hold for some time.”

According to the FedWatch Tool, there is a 99% chance the central bank will keep rates unchanged at 3.5%–3.75% this month. In June, the odds of steady rates stand at 93.8%. The odds indicate a lower probability of the Fed cutting rates in the near term.

This is mainly due to the current global uncertainty and rising inflation. Ongoing inflation concerns, geopolitical tensions such as conflict with Iran, and signs of a cooling labor market are making it harder for the Fed to consider rate cuts anytime soon.

Given current inflation rates well above the Fed’s 2% target, the Fed is taking a hawkish stance. Financial analyst at Bankrate noted, “Even if we get back to where we were prior to the Iran conflict, there’s plenty of evidence that this is not the right time to get back to cutting rates.”

Jerome Powell’s Term Ends

Another major event that everyone is watching is the leadership change in the Federal Reserve. Jerome Powell’s term ends on May 15, 2026. Thus, the upcoming FOMC meeting is expected to be his last similar session.

With Jerome Powell nearing the end of his term, the focus is gradually shifting toward what the next phase of monetary policy could look like. His likely successor, Kevin Warsh, could inherit an economy still dealing with persistent inflation and limited room for aggressive policy shifts.  Therefore, there is a low chance that the Fed will lower interest rates anytime soon.

Ultimately, even if a surprising rate cut decision does not occur, the final words spoken by Chairman Jerome Powell during his tenure might carry weight. It is imperative to note how he discusses inflation trends, economic risks, and future Fed rate cut decisions.

As the Federal Reserve stands at the brink of a leadership transition, this meeting could set the tone not just for the coming months. Instead, it could define the next chapter of US monetary policy.