Interest rates are on the agenda Wednesday, with Federal Reserve Chair Jerome Powell under pressure from President Donald Trump to cut rates. Powell is unlikely to give the president what he wants but markets will watch for any shift in tone from the central bank chief.
Dow Jones Industrial Average futures were flat early Wednesday. S&P 500 futures were gaining 0.1% and Nasdaq 100 futures were rising 0.2%.
Markets were steadying after a drop the previous day as U.S. and Chinese trade negotiators finished talks without a firm agreement on import levies. Trump will make the final decision on an extension to the tariff truce between the countries, which is set to expire on Aug. 12.
Attention will now turn to economic data and the Federal Reserve. While the Federal Open Market Committee’s interest-rate decision Wednesday afternoon is almost certain to result in rates being held steady, it is expected to show dissent within the committee as governors Christopher Waller and Michelle Bowman have favored cuts.
“While we do not expect Chair Powell to suggest a more imminent Fall rate cut, the tone of the official statement will likely be slightly more dovish given the expectation for a dissenting opinion from Fed Governor Christopher Waller,” said Chris Brigati, chief investment officer at SWBC, in a research note. “Chair Powell will likely continue to suggest that the patient approach balancing the dual mandates of price stability and full employment are the primary concerns of the FOMC.
The yield on the benchmark 10-year Treasury stood at 4.334% early Wednesday, ticking up from the previous day.