Investing.com -- Wall Street analysts widely expect the Federal Reserve to hold interest rates steady at its May meeting as policymakers assess the economic fallout from President Trump’s sweeping tariff policies and ongoing uncertainty around inflation and employment.

Morgan Stanley said the Fed is “well positioned to wait for greater clarity,” citing tensions between inflation and labor market stability caused by the trade shock.

The firm expects the Fed to remain on hold into 2025, emphasizing price stability unless the job market deteriorates sharply.

TD Securities called the meeting “The Silence of the Doves,” forecasting no change in policy or forward guidance.

The firm expects Chair Jerome Powell to reiterate that “a one-time increase in the price level does not become an ongoing inflation problem,” maintaining a cautious stance while signaling readiness to respond to economic weakness.

JPMorgan also sees no changes coming next week. Analysts said Powell is likely to underscore that “the Committee is well positioned to wait for greater clarity before making any changes to policy.”

Barclays adjusted its forecast, pushing its expected first rate cut from June to July. “Cutting in late July allows the committee to see more data on the evolution of the labor market,” analysts wrote, adding that the delay reflects persistent uncertainty around tariffs and fiscal policy.

Investec (LON: INVP ), Nomura, and Bank of America similarly expect no change, with BofA describing the May meeting as a “placeholder.” Nomura said inflation risks from tariffs mean “insurance cuts” are unlikely, while Investec noted that “clarity is still some way off” despite the escalation in trade tensions.