Fed expected to keep rates unchanged as Chair Powell pivots back to economics

Main Idea: The Federal Reserve is expected to keep interest rates unchanged this week as Chair Jerome Powell tries to refocus attention on the economy after new legal and political pressure.

Key Points:

• The Fed is likely to leave its key rate at about 3.6% after three straight cuts last year.
• Powell has said the central bank is “well positioned” to wait and see how the economy changes before acting again.
• The Justice Department’s subpoena of Powell over a building renovation and the Supreme Court case involving Fed governor Lisa Cook have added unusual pressure on the Fed.
• Inflation remains above the Fed’s target, while the job market looks steadier, which makes more rate cuts less likely in the near term.