Fresh tariffs amid high inflation are making the Fed’s job uniquely difficult and feeding uncertainty about what to expect for interest rates this year.

With healthy hiring and some progress on inflation, Fed official have said that the pace of rate cuts will slow this year.

The Federal Reserve is expected to keep its key interest rate unchanged this week, despite Donald Trump's calls for cuts.

Outside of a U.S. President bending norms, the Fed also faces challenges in achieving its economic objectives. Inflation remains above its 2% target: Its preferred measure is at 2.4%, though core prices — considered a better gauge of where inflation is headed — rose 2.8% in November from a year ago.

The central bank is pausing to see further progress on inflation following a string of rate reductions last year, said chairman Powell.

Fears of elevated interest rates dampened the mood on Wall Street at the start of this year–but cooling core inflation and dovish comments by Federal Reserve governor Christopher Waller have given investors reason to feel a bit more cheerful this week.

The S&P 500 gained 1% on Friday, capping off the last trading day of Biden's presidency and marking the best week since the election.

An inflation gauge closely watched by the Federal Reserve rose slightly last month, the latest sign that some consumer prices remain stubbornly elevated, even as inflation is cooling in fits and starts.

Policymakers said they “will carefully assess incoming data, the evolving outlook, and the balance of risks” in determining future rate decisions.

Since officials first cut rates in September, inflation has made uneven progress back down toward the central bank’s target. Meanwhile, investor expectations of inflation one and two y

Fixed-income analysts and central bankers care about what’s driving the Treasury bond yield, and it’s something called the term premium. That’s the technical phrase for the amount of interest investors demand over and above where the Federal Reserve sets rates. Recently it’s been rising quickly.

The Fed maintained the monthly cap on the amount of Treasuries it allows to mature each month without being reinvested at $25 billion, while keeping the cap for mortgage-backed securities unchanged at $35 billion.