Global financial markets are closely watching the Federal Reserve’s upcoming policy decision, with expectations firmly pointing toward an unchanged interest rate stance. The meeting comes at a time when inflation pressures remain uneven, geopolitical tensions are intensifying, and US economic data continues to send mixed signals.Traders and analysts are largely aligned in anticipating that policymakers will maintain a cautious approach, opting to assess incoming data before making any adjustments to the current policy path. Attention is also turning to Federal Reserve Chair Jerome Powell’s commentary, which is expected to provide further insight into the central bank’s outlook on inflation, labour market resilience, and global risks.
Regional experts have the following views on the outlook ahead of the decision.
Elevate Financial Services: Madhur Kakkar, Founder & CEO, Elevate Financial ServicesWe expect Powell to emphasize data dependence, Middle East risks, and sticky inflation, thus no rush for cuts. Markets as well have priced in a ‘Hold’ on rates at current levels of 3.5%-3.75%, so this decision, along with current macros are looking supportive for equities, but investors should exercise caution as this could cap bond rallies.
Century Financial: Vijay Valecha, Chief Investment Officer, Century Financial
The Federal Reserve is widely expected to leave interest rates unchanged at its upcoming policy meeting as officials assess rising global risks and softer signals from the U.S. economy. Currently, the benchmark federal funds rate sits in a range of 3.50% to 3.75%.
According to the CME FedWatch tool, traders assign a 100% probability that the Fed will hold rates at this meeting. For the remaining Fed meetings in 2026, markets are reluctant to price in even a single 25-bps rate cut. This assumes that Kevin Warsh will likely take over as the new Fed chair in May.
A Justice Department decision last week to drop a controversial criminal investigation of the Fed has cleared the way for the confirmation of Kevin Warsh. The geopolitical developments continue to complicate the outlook. The US-Iran conflict has pushed oil prices sharply higher, raising concerns about renewed inflation pressures while also threatening to slow global growth. U.S. inflation rose to 3.3% in March 2026 from 2.4% in February, driven by a 12.5% increase in energy costs, with gasoline up 18.9% and fuel oil rising 44.2%. This has reinforced expectations of delayed rate cuts (tighter policy). At the same time, a labour market that is finding its footing will likely keep policymakers on the sidelines with this issue, focusing mainly on countering inflation. Federal Reserve officials are likely to treat the energy shock carefully.On a positive note, economic signals inside the United States are improving. Retail sales soared in March by the most in a year, while job growth rebounded and the unemployment rate unexpectedly fell. Numbers like that mean the Fed will want to keep its options open.
Fed officials are expected to say they will stay flexible and act if needed. Jerome Powell’s press conference will be closely watched for hints about what comes next. Many analysts think the Fed will take a wait-and-see approach for now, as it assesses inflation, the job market, and global risks. Another key question is whether Powell will step down from the Fed’s board after his term as chair ends or stay on as a governor. He is allowed to remain in that role until January 2028. While most Fed chairs leave after their term, some believe Powell should stay to help maintain the Fed’s independence.
