Powell's latest appearance: What awaits the markets at the Fed meeting?

The US Federal Reserve is on the cusp of an important transition, as it prepares for a meeting likely to be the last under its chairman Jerome Powell. According to CME Group's FedWatch tool, financial markets are pricing in an almost certain prospect of the MPC keeping the key interest rate unchanged within the current range of 3.50% to 3.75%. US central bank officials are currently adopting a “lookout” strategy and waiting, "as they closely monitor the effects of the conflict with Iran on the national economy. This crisis poses a double challenge for the Fed, contributing to high fuel prices that fuel inflationary pressures, while creating uncertainty among private sector leaders that may negatively affect employment rates. Powell's presidential term ends next May, ahead of the next FOMC meeting scheduled for June, though his membership The Board of Governors runs until 2028. Powell is expected to step down in accordance with tradition, to make way for Kenneth Warsh, President Donald Trump's nominee who is currently undergoing Senate confirmation proceedings. The final months of Powell's tenure have seen extraordinary developments, particularly with the Justice Department's criminal investigation into cost overruns at the federal headquarters renovation, which was dropped last Friday. Powell described this investigation as A pretext from the Trump administration to put pressure on the central bank, stressing that it will not step down before the end of the case "fully and finally." The U.S. Attorney for the District of Columbia, Jeanine Perot, announced on Friday that the investigation would be referred to the federal internal watchdog, with the possibility of reopening it if necessary. The upcoming press conference on Wednesday may clarify Powell's position on the conclusion of the investigation, while Warsch pledged during his confirmation hearing to bring about A “radical change” in the central bank that includes shrinking financial assets and adjusting the approach to dealing with inflation data.