What To Expect From The Federal Reserve's Meeting Wednesday

Markets are pricing in a near-certain Federal Reserve decision to keep the federal funds rate unchanged at 3.50%–3.75% at the April meeting, reflecting a “wait-and-see” Fed amid uncertainty from the Iran war. Higher gasoline prices have added upside inflation pressure while geopolitical-driven business caution could damp hiring, leaving policymakers torn between combating inflation and supporting employment. Investors should expect a tone of stability from Chair Jerome Powell at the post-meeting briefing, though the meeting may mark his likely final FOMC session ahead of a potential transition to Kevin Warsh. Warsh’s promised “regime change” — including shrinking the Fed’s balance sheet and altering forward guidance — could have meaningful medium-term market effects if confirmed. Overall, the immediate market impact should be muted by a hold, but leadership and policy-shift risks keep uncertainty elevated.