02:08 PM EST, 01/28/2025 (MT Newswires) -- The Federal Open Market Committee is widely expected to maintain the range for its federal funds rate at the current 4.25% to 4.50% at its meeting this week after reducing the range by a combined 100 basis points in the last three meetings of 2024.

Currently, the CME's FedWatch Tool sees a 99.5% change of no change to the current target range and a 0.5% chance of a 25-basis point rate reduction to a range of 4.00% to 4.25%.

The FOMC's statement following Wednesday's meeting is due for release at 2:00 pm ET, with Federal Reserve Chairman Powell's press conference scheduled to begin at 2:30 pm ET.

With no update to the Summary of Economic Projections at this week's meeting, alterations to the statement and Powell's comments at the press conference will be viewed for clues to the path for policy going forward.

Since the December meeting, Fed officials have emphasized the need for data dependence now that the policy rate has been cut by a full percentage point, with some disagreement on when the next rate reduction should occur and how low the target range should ultimately get. Most agree that the FOMC should act "cautiously" when determining policy in the current environment.

Concerns about tariffs under the Trump administration have recently lifted consumer inflation expectations, which could lead to higher actual prices as demand is pulled forward and businesses respond.

Fed officials, including Powell, said that they would study the possible effects of tariffs on the economy, but cautioned that the FOMC will need to wait to see what tariffs are implemented before incorporating those into their deliberations.

Likewise, some officials believe that current policy is less restrictive than others would suggest and, with inflation still elevated, would call for fewer policy reductions in 2025. The update to the SEP in December showed only two rate cuts this year compared with four in the previous estimate.

While there is an overwhelming expectation of no change in rates at the current meeting, the outlook for the March 18-19 meeting is more balanced. Currently, there is a 69.6% chance being priced in for no change at that meeting and a 30.4% chance of a rate reduction.

"In the press conference, we expect Chair Powell to sound confident on disinflation given recent inflation outturns, keeping a rate cut in March on the table," said Morgan Stanley in a research note. "That said, trade and immigration policy uncertainty is likely to keep the Fed cautious."