May Federal Reserve Meeting & Market Outlook
As expected, the Federal Reserve announced it would maintain the Federal Funds rate range at 4.25% to 4.5% on May 7, 2025, marking the third consecutive meeting without a change. This decision reflects the central bank’s cautious stance given current economic uncertainties, particularly those stemming from recent trade and tariff policies implemented by the Trump administration.
In its official statement, the Federal Open Market Committee (FOMC) highlighted increased risks to both sides of its dual mandate: maximum employment and price stability. The committee noted that while overall U.S. economic output appears solid; unemployment numbers are low and inflation data from March cooled some, the outlook for employment and price stability has become more uncertain due to trade policy developments.
During the subsequent press conference, Fed Chair Jerome Powell elaborated on these concerns, emphasizing that the recent tariffs could lead to higher inflation and slower economic growth. He pointed out that the first quarter GDP had edged down, partly due to businesses accelerating imports ahead of anticipated tariffs, which complicated economic assessments.
Powell also addressed the potential for stagflation – a scenario characterized by rising inflation and unemployment coupled with stagnant demand. He acknowledged that if the tariffs remain in place, they could delay progress on reducing inflation and postpone potential rate cuts.
Despite political pressure to lower rates, Powell reaffirmed the Fed’s independence and data-driven approach, stating that the central bank is not in a hurry to adjust rates given current uncertainties and will wait for greater clarity before making further decisions. Financial markets responded positively to the Fed’s announcement on May 7, with major indices ending the day higher.
Overall, we agree with the Fed’s decision given current uncertainties, and we continue to expect markets to be volatile as news evolves with trade policy. Stocks have rebounded sharply since the Trump administration announced a 90-day pause on some tariff implementation on April 9. Stocks have also responded well to strong overall Q1-25 corporate earnings, with around ¾ of S&P 500 companies reporting stronger than expected earnings so far.
As we’ve stated in recent notes and videos to clients, we think US corporations and households remain strong, and we expect some positive level of trade negotiations to emerge. As of this writing, it appears negotiations are taking place with the United Kingdom, and talks are set to begin with China. These are positive developments. However, these are complex issues and will take time to resolve, so we expect pockets of market volatility to persist until there is more clarity. Patience, balance, and discipline remain key tenets to investing success during this period of uncertainty and volatility. We do not recommend making any major changes to your investment strategies right now unless something has changed with your needs for cash or time horizon. We look forward to continuing to serve you as we move forward.
Source: Federal Reserve Board, BlackRock, Factset Earnings Insight 5/2/25
Terms and Conditions | Privacy Policy | Disclosures
Case studies are intended to illustrate the types of financial issues faced by actual clients. They should not be construed as a testimonial for or endorsement of Lineweaver Wealth Advisors. They do not represent the experience of any advisory client. Each client’s situation is different, and their goals may not always be achieved. Lineweaver Wealth Advisors, LLC, is not engaged in the practice of law or accounting. Tax information provided is general in nature and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Tax rules and regulations are subject to change at any time.
Crain's Cleveland Business is a print and online newspaper delivering local business news and information to Cleveland's business executives, which is published by Crain Communications Inc. The Crain's list may employ different methodology than described above for similar designations granted in other years. No clients were consulted and no fees were paid to determine the winners; the award is based on assets under management. Neither the participating candidates nor their employees pay a fee in exchange for inclusion on Crain's List. However, recipients may pay a fee to Crain, an affiliate, or an unaffiliated third party in exchange for plaques or article reprints commemorating the designation. The publication should not be construed by a client or prospective client as a guarantee that they will experience a certain level of results if the recipient is engaged, or continues to be engaged, to provide investment advisory services; and should not be construed as a current or past endorsement of the recipient by any of its clients. In 2025, 2024, 2020 and 2019 Lineweaver Wealth Advisors (“LWA”) was ranked in the Top 25 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. In 2023, LWA was ranked in the Top 15 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. In 2021 and 2022, LWA was ranked in the Top 20 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. For all years the awards were based on assets under management.
Nominees in the Top 100 Magazine selections are not required to pay a fee for consideration. Individuals appearing in half and full page editorials, have paid a fee for additional exposure. Candidates for consideration are selected utilizing proprietary software. Top 100 Magazine analyzes the results before making their final selections. Financial Professionals and/or wealth managers must also met the following criteria; 1. Be registered with the SEC as a registered investment advisor or a registered investment advisor representative; 2. Have no more than 1 filed complaint with a regulatory agency; 3.Never been convicted of a felony. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the Financial Professional by any client nor are they representative of any one client's evaluation. Participants for the Top 100 in Finance appearance were reviewed in 2022, and recognized in March of 2023. Lineweaver Financial Group appeared in Money magazine in 2015, Fortune Magazine in 2016, WTAM 1100 in 2018, Forbes in 2020, Channel 5 in 2020, and Top 100 in Finance in 2023.
Lineweaver Financial Group ©
Powered by 
Virteom