The central bank will likely hold rates at their current level of 4.25%-4.5%, just as it did during its last meeting in January. Since then, Federal Reserve Chair Jerome Powell had said publicly he did not believe the current state of the economy warranted further rate cuts. Without a need to cut, he preferred to wait, given heightened levels of unpredictability in the markets. 

“’Uncertainty’ is central bankers’ new policy-outlook mantra,” Macquarie global foreign exchange and rates strategist Thierry Wizman wrote in a note. 

Most of the lack of clarity stems from the new administration of President Donald Trump, who has pledged a series of unorthodox fiscal and trade policies. Early implementation of some of those policies, in particular a hardline tariff regime, has already roiled markets.

As of last Friday, the stock market lost $5 trillion in value after stocks tanked over investor fears the U.S. was walking into a trade war with both its allies and adversaries. Matters weren’t helped when Trump wouldn’t rule out a recession and Treasury Secretary Bessent said he wasn’t worried about the recent stock slump. 

“U.S. policymakers aren’t providing any encouragement to the growth or equities story,” Wizman wrote.

With little reassurance from the executive branch, investors will be even more attuned to Powell’s words as well as the Fed’s forward guidance and outlook on the economy.

This time around, the range of options is especially wide. Most investors expect two or three rate cuts mostly in the back half of the year. However, Trump’s proposed policies of widespread tariffs and possible mass deportations would be inflationary, meaning that rate hikes are also possible, according to Melissa Brown, head of investment decision research at investment technology firm SimCorp.

“These threats not only counter the need for cuts, but suggest that increases could be in order,” she told Fortune in an email. “We will have to listen closely to the language they use for any insight into what direction they might choose—if they choose to make changes at all.” 

Brown will be on the lookout for one word above all. “The word I am listening for and dreading the most is stagflation,” she said. 

While there are no current signs of stagflation, its specter looms over the economy. In recent weeks, several investors have warned of the possibility the U.S. could enter the dreaded scenario of high inflation and low growth that can trap economies for years. 

Buoying investors’ hopes is the fact that the economy and the stock market are coming off a strong 2024. Inflation came under control, though never hit the Fed’s 2% target. At the same time, unemployment didn’t rise unexpectedly, and the S&P 500 hit record highs. But the economy is teetering on the brink of a downturn, making Powell and the Fed’s decision critical. 

“We see mounting downside risks to the economy that could require the Fed to reduce rates in 2025,” Deutsche Bank wrote to investors in an analyst note. “Like the Fed, we hope to get a better sense of the details around policies before deciding whether an adjustment is needed. However, the data and financial markets might not allow us or the Fed to be so patient.”

Powell himself preached patience during a speech earlier this month. “The costs of being cautious are very, very low,” he said. “The economy’s fine. It doesn’t need us to do anything, really. And so we can wait, and we should wait.”

Over the subsequent week, the S&P 500 fell roughly 250 points and the Dow Jones a further 1,988, as investor panic rippled through the market. Though stocks started to rebound Friday and Monday, investors will still be looking to the Federal Reserve to keep them out of any more choppy waters.