Federal Reserve Chair Jerome Powell seems unlikely to announce a rate cut plan on Wednesday following the central bank’s policy meeting. That puts him on a similar path as his predecessors, according to Nicholas Colas, co-founder of DataTrek Research. Powell’s term as the Fed’s leader is set to expire in May, leaving him with just eight more Federal Open Market Committee meetings in the top position, including this week’s. Previous Fed chairs tended to be more conservative with regard to rate cuts in their final year, Colas said in a note to clients. “The last 3 Fed Chairs” — Alan Greenspan, Ben Bernanke and Janet Yellen — “all ended their terms on a hawkish note,” Colas wrote. “Powell is continuing that trend, focused on exiting the job with his inflation-fighting credibility and political independence intact.” This history could be one reason that markets seem to anticipate the Fed will be slow to cut this year, even with recent data pointing to inflation and economic growth cooling and with political pressure from the Trump administration. As of Tuesday afternoon, traders expected two quarter-point rate cuts by the end of 2025, according to pricing in the fed funds futures market as measured by CME FedWatch tool . The market odds for just one cut this year have increased over the past month, as well. The uncertainty around President Donald Trump’s tariff policies is likely another factor that could keep Powell and the Fed from cutting rates, even if recent data points in that direction. The good news is that a more hawkish Fed is not necessarily a bad thing for the stock market. Colas said the S & P 500 has rallied by an average of 16% in the final 12 months of the previous three Fed chairs’ terms. “Investors understand that Fed Chairs are thinking about their inflation-fighting legacies in their last months in office,” Colas said. “On top of that, Powell may also be considering how history will judge his role in maintaining the Fed’s political independence. We should consider whatever he says – or doesn’t say – on Wednesday through that lens.”
