This week's FOMC, the market is most looking forward to a promise from the Federal Reserve

This week, Powell faces a tricky task of assuring investors that the U.S. economy remains solid while signaling readiness to intervene if necessary.Recent anxiety caused by Trump's tariffs has led to a stock market crash over the past month. As concerns about the economic outlook have intensified, bond yields have also declined, and consumer confidence has followed suit.For the market, what investors are most concerned about is whether the Federal Reserve will commit to taking interest rate cuts when signs of economic weakness appear. Bloomberg analysis suggests that Powell may avoid making such a commitment.Unless, accompanied by an important premise: officials need to see inflation consistently moving towards their 2% target and expectations for future price increases remaining stable.Dominic Konstam, head of macro strategy at Mizuho Securities USA, stated: “Powell needs to send some kind of signal that they are paying attention to the situation.” He warned that while the Fed chair may clearly state that officials do not target the stock market, they cannot ignore the recent declines.Uncertainty in Tariff Policy: Business and Consumer Confidence DentedThe market generally expects that the Federal Reserve will keep interest rates unchanged at the meeting on March 18-19, but investor concerns about growth have resurfaced, and they have begun to anticipate three rate cuts in 2025, most likely starting in June. However, Powell and his colleagues are facing the same uncertainties as investors.Last Sunday, Trump downplayed concerns in a television interview about his aggressive tariff policy potentially leading to an economic recession, claiming that reforms to the trade system would bring long-term benefits. As a result, the market fell sharply. The S&P 500 index has declined for the fourth consecutive week, entering a correction territory along with the Nasdaq Composite Index, which has dropped 10% from recent highs.Meanwhile, the closely watched consumer confidence index from the University of Michigan fell to a 29-month low of 57.6 in March, down from 64.7 the previous month. The uncertainty in policy is driving market panic, leading to concerns about growth prospects.This makes it unlikely for Powell to deviate from his recent wait-and-see attitude. In remarks earlier this month, he stated that sentiment indicators are often not strong guides to actual economic activity, and policymakers can wait for a clearer outlook.“The upside risk of inflation leads us to believe that, despite the recent weakness in the stock market, the likelihood of a ‘Powell put option’ emerging in the next week is low,” said Stephen Brown, deputy chief economist for the U.S. at Capital Economics, in a report:“For the Federal Reserve, the issue is that the increase in layoffs triggered by policy will be accompanied by inflation rising due to policy.”Kevin Gordon, senior investment strategist at Charles Schwab, stated:“I think the nature of policy-making is far more serious than the tariffs themselves. Many companies are starting to say, ‘If there are going to be tariffs, that’s fine— just tell me what the tariffs are and don’t change them.Gordon is concerned that companies will reduce spending, hiring, and other activities, leading to an economic slowdown and possibly a recession.James Athey, portfolio manager at Marlborough Investment Management, stated:“Marginally, the Federal Reserve may make things slightly better or slightly worse. But clearly, they cannot fully reassure the market, as this sentiment shock largely comes from the White House.”