It is expected that the Fed will decide to keep interest rates stable.

Federal Reserve's Interest Rate Decision is Coming

Today, the Federal Reserve (Fed) will announce its interest rate decision in its first meeting of 2023. The decision will be announced at 22:00 TRT, while Fed Chairman Jerome Powell's press conference will be held at 22:30 TRT.

Will the Interest Rate Range Remain Unchanged?

Following three consecutive meetings where the Fed has lowered interest rates, it is expected to keep the policy interest rate range at 3.50–3.75%. This suggests that the main agenda of the meeting will be focused on recent political and economic discussions rather than interest rates.

Political Pressures and Independence Debates

This meeting is significant as it is the first to occur after the court subpoena received by the Fed following its recent building renovation. Additionally, the Supreme Court has recently heard arguments regarding Trump's attempt to remove Fed Governor Lisa Cook, who was accused of misconduct in a mortgage application.

Powell's Message and Market Expectations

During the press conference, Powell may address political pressures directed at the Fed, the independence of the central bank, and the new measures he may take as his term will end in May. Ahead of the meeting, the majority of Fed officials have expressed that the weakening labor market needs support, while some officials have emphasized that high inflation remains a primary risk.

Economists' Assessments

Tim Duy, Chief Economist at SGH Macro Advisors, indicated that Fed officials might be inclined to "pause interest rate cuts and reassess based on data," while Karim Basta, Chief Economist at III Capital Management, anticipates that Powell may convey a message that interest rates are "at a good level for now."

Bloomberg economists Anna Wong and Chris Collins note that pausing interest rate cuts could provoke new reactions from the White House. Trump stated that he would announce his choice for the Fed presidency "very soon," adding, "You will see interest rates drop a lot."