Will Powell's Remarks Signal Rate Easing? Investors Watch Closely

Investors are looking to Wednesday’s conclusion of the Fed’s two-day policy meeting, which will feature an rate policy decision and a subsequent press conference with Fed Chair Jerome Powell.

While the market’s pricing indicate that the Fed will maintain its benchmark overnight borrowing rate in a range between 5.25%-5.5%, the market will be watching for central bankers’ updates to their Summary of Economic Projections, which could clarify the path for policy. Investors have grown increasingly concerned that the recent strong jobs report and sticky inflation support a higher-for-longer interest rate environment.

“The market will be focused on any mention—within the Fed statement, the dot plot, or Chair Powell’s comments—of concerns regarding the labor market, given Powell’s remarks that indications of deterioration could prompt the easing of rates,” said Quincy Krosby, chief global strategist for LPL Financial.

May’s consumer price index print, a broad measure of goods and services costs, will also be released on Wednesday morning. The report is forecasted to show just a 0.1% increase from April and a 3.4% rise on a year-over-year basis.