From Yahoo Finance: 2025-05-06 15:13:00

The Federal Reserve faces a challenging decision on interest rates, balancing low inflation and unemployment goals that often conflict. Fed Chair Powell’s restrictive policies led to an increase in unemployment, prompting multiple rate cuts. Tariffs imposed by President Trump have potential inflationary effects, complicating the Fed’s decisions.

Recent economic data, including strong job growth and negative GDP growth, have shifted market expectations for interest rate cuts. Odds of a rate cut in May are low, with forecasts changing rapidly. Some experts believe the Fed may hold off on further cuts until later in the year, depending on inflation and job data.

Read more: Analyst unveils surprising Fed interest rate cut prediction