FOMC Meeting to Set Tone as U.S. GDP Forecast Hits 2.4% and Jobs Data Looms

The Federal Open Market Committee (FOMC) convenes this week amid heightened anticipation, with policymakers expected to hold interest rates steady despite political pressure from the White House. The federal funds rate is likely to remain in the 4.25% to 4.5% range, a decision that comes as President TRUMP intensifies his calls for rate cuts and criticizes Fed Chair Jerome Powell over the central bank's $2.5 billion headquarters renovation.

Economic data releases will dominate the week, with the advance estimate of Q2 GDP projected to show a 2.4% rebound. However, underlying weakness in consumer spending tempers optimism. The July jobs report, due Friday, may reveal slower hiring momentum and a potential uptick in unemployment to 4.2%.

Market participants are scrutinizing every signal from Powell, who faces the delicate task of balancing economic uncertainties with political crosscurrents. Morgan Stanley's Michael Gapen suggests the Fed chair will emphasize patience, maintaining the central bank's data-dependent approach.