Fed Expected to Hold Rates Steady But Investors Eyeing Clues on Potential Cuts Later This Year

The Fed is expected to hold interest rates steady at 5.25% at this week's meeting, while investors will look for clues on potential rate cuts later this year.

Attention will be on the Fed's economic projections, known as the "dot plot," for signals on officials' thinking about the path of rate hikes.

Inflation slowed in 2023 but ticked up more than expected in January, dashing hopes of a rate cut at this meeting. Markets now expect cuts could start this summer.

Fed Chair Powell will likely reiterate the Fed is in "wait-and-see mode" and wants to see more evidence inflation is slowing before cutting rates.

The Fed's latest forecasts may show officials now expect fewer rate cuts in 2023 than the 3 cuts they projected in December.