Publication date: May 2, 2025

The week ahead: US interest rate decision

In Money Care's weekend report, we present you with an overview of the (macroeconomic) events that could cause movement in the stock markets.

Brief review of last week:

Trade war continues:

Increased tariffs have led to significant disruptions in global supply chains. Experts warn of empty shelves and price increases in the coming weeks, especially in low-margin consumer goods.

U.S. imports from China have fallen 36%, and companies are postponing new orders pending resolution. In China, industrial production fell more than expected, putting pressure on economic growth.

President Trump has indicated that tariffs on Chinese imports "may fall substantially," but will not be reduced to zero. For its part, China has said it is willing to hold talks, provided they are based on equality and mutual respect. The trade war also affects other countries. China is warning countries that make economic deals with the U.S. at China's expense and threatening countermeasures. The European Union is considering new trade proposals to reduce the impact of the trade war.

Although there are signs of willingness to dialogue, tensions between the U.S. and China remain high. The economic impact is felt worldwide, and it is uncertain if and when a lasting solution will be reached.

US Labor Figures

Last month, hourly wages in the US rose less than expected, but more new jobs were added than anticipated. The unemployment rate remained unchanged at 4.2%.More jobs at slightly lower wages presents a mixed picture and, in our opinion, is unlikely to prompt the FED to lower interest rates next week.

Upcoming week:

The Federal Reserve will announce its interest rate decision at 8 p.m. on Wednesday, May 7, following the two-day FOMC meeting. The central bank is expected to leave interest rates unchanged at the current level of 4.25% to 4.50%.

Fed officials, including Chairman Jerome Powell and Governor Christopher Waller, stress the importance of patience and caution in adjusting monetary policy. They want to see clearer signs of a decline in inflation or a weakening of the labor market before they consider cutting interest rates.

The next FOMC meeting is scheduled for June 17-18, 2025, and an interest rate cut could potentially be on the agenda then if economic indicators deteriorate.

The stock market calendar week 18:

Here is the most important economic data for the coming week.

Monday, May 5, 2025:

• United States:
  
  
  • 15.45 Services purchasing managers' index (PMI) April (expected: 51.4)
  • 16.00 ISM non-manufacturing manufacturing index April (expected: ---)

Tuesday, May 6, 2025:

Wednesday, May 7, 2025:

• United States:
  
  
  • 20.00 Interest rate decision expected: 4.25-4,5%

Thursday, May 8, 2025:

• United States:
  
  
  • 14.30 First applications for unemployment benefits expected: 

Friday, May 9, 2025:

No important macro economic data

Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' insights and experiences. They are therefore for educational purposes only.