The Fed is about to run into an unstoppable force: Donald Trump

In its first key decision of President Donald Trump’s second term, the Federal Reserve is widely expected to hit pause on rate cuts Wednesday.

In its first key decision of President Donald Trump’s second term, the Federal Reserve is widely expected to hit pause on rate cuts Wednesday. It’s not a decision that is likely to land well with Trump, who has argued that the president should have some say in Fed decisions, explaining “I think I know interest rates much better than they do, and I think I know it certainly much better than the one who’s primarily in charge of making that decision.” Fed Chair Jerome Powell will have a chance Wednesday afternoon to counter that point during his post-meeting news conference, when he lays out the reasoning behind the central bank’s latest decision. After finally cutting rates three times in a row late last year, the Fed is about to begin a holding pattern that could stretch through the spring, mostly because of inflation’s limited progress in recent months. A strong US economy — with low unemployment and healthy growth — also suggests the Fed can comfortably hold off on cutting rates as it waits for inflation to slow further. Fed officials have communicated as much in recent speeches, while also stressing that rates will likely come down eventually. However, traders continue to bet that there won’t be a cut at the Fed’s March meeting, either. Wall Street will be listening closely to Powell for any hints on the timing of future rate cuts. Investors probably won’t get much clarity there, since questions linger over how Trump’s proposed policies could affect the economy.