Fed Meeting: Two Ways Powell Could Move The S&P 500 (Live Coverage)

• Markets price in just 3% odds of a rate cut at today's meeting and only 18% for the March 18 meeting, with 60% odds of at least 50 basis points in cuts by year-end
• Powell faces pressure from a DOJ criminal investigation into his congressional testimony, which he called 'pretexts' aimed at applying political pressure on Fed independence
• The S&P 500 briefly topped 7,000 for the first time Wednesday morning, extending its winning streak to potentially six sessions

Federal Reserve Meeting Analysis Summary

Key Market Context

The S&P 500 opened slightly higher Wednesday, briefly surpassing 7,000 for the first time after achieving a record close Tuesday. Markets show minimal expectations for immediate Fed action, with CME Group's FedWatch tool pricing only 3% odds of a rate cut at the current meeting. Probability increases to 18% for the March 18 meeting and 31% for April 29. Markets are pricing in a year-end federal funds rate of 3.155%, suggesting 60% odds of at least 50 basis points in cuts by year-end.

Critical Factors to Watch

Fed Chair Jerome Powell's 2:30 PM ET press conference could drive market volatility based on two key issues:

1. Labor market assessment and economic outlook
2. Powell's tenure decision - whether he'll continue as Fed governor through February 2028 or vacate when his chairmanship ends May 15

Powell Independence Controversy

A DOJ criminal investigation into Powell's congressional testimony regarding Fed renovation projects has intensified speculation about his future. Powell characterized the investigation as "pretexts" designed to apply political pressure, stating concerns about whether the Fed can "continue to set interest rates based on evidence and economic conditions" rather than political influence. Some Senate Republicans have expressed concern about the probe.

Additional Market Drivers

• U.S. dollar fell to five-year low against advanced-economy currencies
• Major tech earnings after close: Tesla, Meta Platforms, and Microsoft - with capital spending guidance crucial for AI sector
• Nasdaq gained 0.15%, approaching record highs

The combination of Fed policy signals and Powell's future could significantly impact current bull market momentum.