Stocks were wavering in premarket trading Wednesday as markets waited for the Federal Reserve’s latest interest-rate decision from what could be one of the central bank’s most divisive meetings in recent history.
Futures tied to the Dow Jones Industrial Average were up 6 points, or broadly flat. The S&P 500 and Nasdaq 100 were also stalling in premarket trading. All three indexes closed lower in the previous session.
The central bank’s monetary policy committee is due to make its decision at 2 p.m. Eastern time after a second day of deliberation in a two-day meeting that has been under scrutiny for political as well as economic reasons.
President Donald Trump has loomed large over proceedings. He attempted to remove Fed Gov. Lisa Cook from the central bank’s board and an appeals court said Monday she can keep her job for now. The president said he will fight the latest decision. Trump’s Fed pick Stephen Miran will also attend the meeting after the Senate narrowly passed his nomination on Monday evening with a vote of 48-47.
The president has been pushing for rate cuts and criticizing Fed Chair Jerome Powell for not making any. He is likely to get his wish with a quarter-point reduction widely expected.
Discussions and individual member voting will be key, with Powell potentially facing dissent on the anticipated quarter-point cut. Officials aligned with Trump’s view will likely argue against tighter monetary policy, saying it is holding back the economy and may push for a bumper half-percentage point cut. While some regional Fed bank presidents have indicated they are uneasy about stimulating the economy when inflation has stalled out well above the central bank’s target.
“A wide range of arguments exist that support a steady benchmark or a jumbo 50 [basis points cut]. The significant disagreements across the economic arena are poised to produce frowns throughout the committee, with some voting members worried about inflation while others exhibit labor health nervousness,” wrote Jose Torres, a senior economist at Interactive brokers.
The so-called ‘dot plot’–projections showing where each official expects interest rates to be in the months ahead–will be closely scrutinized along with any comments from Powell in his press conference.
Among equities, StubHub’s initial public offering will be watched keenly. The popular marketplace for ticket resales begins trading today, after pricing its IPO in the middle of its expected range. It’s the latest in a string of recent IPOs and the company plans to sell 34 million shares, priced at $23.50 each, valuing StubHub at $8.6 billion.
Elsewhere, China remains in focus as negotiators from Washington and Beijing thrash out the details of a deal to keep TikTok active in the U.S. The arrangement, discussed by U.S. and Chinese negotiators in Madrid this week, would create a new U.S. entity to operate the app, with American investors holding a roughly 80% stake and Chinese shareholders owning the rest, according to a Wall Street Journal report that cited people familiar with the matter.
It is seen as a precursor to a trade agreement between the world’s two biggest economies and a potential meeting between Trump and China’ leader Xi Jinping later this year.
In other market news, the two-year Treasury yield was trading at 3.507%, the 10-year yield was at 4.023%, while the 30-year yield traded at 4.643%, according to Tradeweb.
The DXY dollar index was rising 0.1% against a basket of currencies after hitting a two-month low yesterday.