The Federal Reserve will emphasize a wait-and-see stance

Federal Reserve Chairperson Jerome Powell will almost certainly express a wait-and-see approach at this week's meeting, Weissman, chief economist and portfolio manager at MFS Investment Management, said in a note. The confusion over U.S. tariff policy makes the future macroeconomic outlook particularly difficult to predict. The Fed will also take note that tariff-induced inflation, even if it is theoretically seen as temporary, could produce more persistent real inflation. As a result, the Fed will be reluctant to ease policy without a clear signal that the economy is weakening materially. In other words, in the absence of a real economic deterioration, the Fed may delay rate cuts if necessary.