Fed Holds Steady, Big Earnings Afternoon: MSFT, TSLA, META & More

Wednesday, January 29, 2025

Market indexes had been riding a zero balance for most of today’s trading session, but shifted lower following the news release of what we all knew ahead of time: the Fed did not move on interest rates at the end of its two-day meeting on monetary policy, keeping steady at +4.25-4.50% for the second-straight meeting. The Dow shed another -136 points today, while the S&P 500 gave back -28, the Nasdaq -103 and the small-cap Russell 2000 -4 points in late trading.

Fed Keeps Interest Rates Steady on Stable Economic Report Card

In his press conference following the Fed statement that interest rate changes would remain in place, Fed Chair Jerome Powell had very little to criticize in today’s U.S. economy: Inflation is now much closer to the Fed’s optimum +2% rate than it has been over the course of rate adjustments going back nearly three years, even as it has drifted back up near +3% from a +2.4% reached in September of last year. Unemployment has stabilized since mid-2024, and has remained historically low.

Powell does not see labor as a significant source of inflation, with nominal wage growth having eased over the past year. Activity in Housing has also stabilized, with resilient Consumer Spending keeping the economy buoyant. The Fed Chair said rather emphatically that it will not be adjusting its +2% inflation rate goal anytime soon. Considering the potential impact of tariffs, Powell inferred he was in the same boat as everyone else: we’ll need to wait and see.

Biggest Afternoon of Earnings Results So Far