Markets ticked higher on Wednesday as investors awaited the Federal Reserve‘s policy decision and economic projections, while President Donald Trump once again publicly criticized Fed Chair Jerome Powell and called for an immediate interest rate cut.

Speaking early Wednesday, Trump labeled Powell “a stupid person,” reiterating his long-standing belief that the Fed’s tight policy stance is hampering economic growth. The comments come just hours before the Fed is expected to hold interest rates steady, maintaining a cautious pause that began in January.

The focus now shifts to the Fed’s updated economic and interest rate projections, which will outline policymakers’ expectations through 2027 and beyond. Fed Chair Powell is scheduled to hold a press conference at 2:30 p.m. ET, shortly after the central bank releases its 2 p.m. statement.

Key Market Drivers:

• Inflation Data: Despite fears tied to Trump’s tariffs and rising oil prices, May’s consumer price index revealed only modest increases, helping temper inflation concerns.
• Economic Mixed Signals: Housing and construction data disappointed Wednesday, while weekly jobless claims edged slightly lower, painting a mixed picture of the economy’s strength.
• Geopolitical Tensions: Middle East tensions remain high. Rising fears of disruption in the Strait of Hormuz—through which 20% of the world’s oil passes—have added volatility. Trump has hinted at a potential military strike on Iran but said the country’s leadership won’t be targeted “for now.”
• Global Trade Uncertainty: Trump left the G-7 summit without new trade agreements and faces a July 9 deadline to raise tariffs on several key allies. Talks with Canadian PM Mark Carney are expected later this week.

Analyst Outlook:

Market participants remain focused on whether the Fed’s updated “dot plot” projections will hint at potential rate cuts later this year. With energy prices climbing and global trade conflicts intensifying, the Fed faces a complex balancing act between supporting growth and containing inflation.

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