- The Dow Jones is trading flat on Wednesday as the Fed leans into a wait-and-see stance.
- Markets now expect the Fed to stand pat until June at the earliest.
- Despite the forecast of no rate moves, markets will be watching the FOMC closely.
On Wednesday, the Dow Jones Industrial Average (DJIA) remained steady, hovering around 44,800. This major equity index is currently near its all-time highs above 45,000, but stock traders still have a bit of work to do to push bids back into those record peaks.
As many had expected, the Federal Reserve (Fed) decided to hold rates steady. Fed Chair Jerome Powell emphasized the Fed’s commitment to a data-driven approach to future rate adjustments.
Chair Powell mentioned that the Federal Open Market Committee (FOMC) is carefully observing US President Donald Trump’s policies; however, he clarified that the President has not directly contacted the Fed. As an independent federal institution, the White House’s influence over the Fed’s policy guidance is quite limited.
He also pointed out that although inflation is gradually moving toward the target levels, the current economic climate, along with certain concerns regarding President Trump’s ambitious trade policies, means the Fed isn’t in a hurry to modify the current restrictions on policy rates.
In the rate markets, expectations for Fed rate cuts in 2025 have been reduced. The CME’s FedWatch Tool indicates that rate futures markets predict no changes to the Fed funds rate until at least June.
Dow Jones news
Most of the Dow Jones is holding in tepid territory ahead of the Fed’s latest rate call. The equity index is roughly split down the middle between losers and winners, though Nvidia (NVDA) is continuing its latest trend of falling to the bottom. Nvidia is down another 4.6% on Wednesday, falling below $123 per share as the chip-punching silicon merchant continues to take a pummeling as China’s open-source AI megamodel, DeepSeek, threatens US venture-capital-fueled AI infrastructure dominance.
Dow Jones price forecast
The Dow Jones Industrial Average is drying out just south of record highs above 45,000, with intraday price action testing the waters near 44,800. A topside break will see the Dow Jones chalking in fresh all-time peak bids, while a bearish turnaround will mark the major equity index’s first ‘lower high’ pattern since mid-2024.
Dow Jones daily chart
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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