Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Wednesday, January 29th, and I'm your host, Kim Khan. This is a special Fed edition of Wall Street Lunch.

The Federal Reserve kept rate steady, as expected, while Fed Chief Jay Powell came in on the

Dover's side also as expected. The FOMC voted unanimously to keep the Fed funds rate at 4.5%

at 4.5%. That was never really in doubt. There was a little jolt for the statement, though,

which dropped the language that inflation has made progress to the committee's 2% objective.

Rates rose and stocks extended losses before Powell stepped up to the mic.

But Powell quickly eased concerns, saying that the change in language on inflation was a result

of cleaning up the sentence and not meant to be a signal.

Yields then moved back from highs while stocks trimmed losses.

The markets are still pricing in,

a first quarter point cut for 2025 coming at the June meeting, but the odds rose to one in

three from one in four that the Fed would stay steady at that meeting as well. Two cuts remain

priced in for the full year. Wells Fargo economists said, with policy remaining somewhat restrictive,

albeit not as restrictive as a few

months ago, we are penciling another 50 basis points of easing by the end of 2025, 25 basis points

in September, and another 25 basis points in December. Thereafter, we look for the FMC to maintain

its target range at 3.75 to 4% through the end of 2026.

Double-line capitals, Jeffrey Gundlach, says a maximum of two cuts as possible this year,

and one could be the base case.

In the absence of monetary policy excitement, the press corps naturally tried to lure

Powell into the political arena, but the chairman didn't take the bait.

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