The upcoming Federal Reserve gathering on May 1 has attracted significant attention, with many expecting the central banking authority in the United States to potentially reduce the federal funds rate during this juncture of the year. Presently, predictions in the market indicate that the likelihood of a rate decrease is minimal, as revealed by Cleveland Federal Reserve President Loretta Mester, who stated her difficulty in envisioning a rate cut happening in May.

Tuesday saw a downturn across all four primary U.S. stock indices, reflecting the burgeoning contemplation within the market regarding the timing of the next potential rate cut by the U.S. Federal Reserve. While both equity and cryptocurrency markets experienced notable declines, the price of gold per ounce saw an upsurge during Tuesday's trading sessions. Following the March Federal Open Market Committee (FOMC) meeting, officials opted to maintain the federal funds rate (FFR) at a stable rate of 5.25-5.5%. As the next FOMC session looms, prospects of a rate cut appear bleak, with forecasts indicating a 97.7% probability against such an adjustment.

The high probability of no rate reduction in May stems from the Fedwatch tool offered by CME Group, recognized for its remarkable accuracy in predictions. Notably, only around one-third of economists currently posit a rate cut occurring in that month, a stark contrast to the beginning of the year when 90% believed it was imminent in May. Strong manufacturing data from the U.S. in March exceeded expectations, while inflation persistently surpasses prior forecasts, indicating that Fed Chair Jerome Powell and his associates are unlikely to promptly initiate rate decreases.

In a press address on Tuesday, Cleveland Fed President Loretta Mester discussed the forthcoming FOMC gathering in May. Mester conveyed her skepticism, stating, "It's challenging for me to foresee that by May." She added, "We need more evidence indicating that inflation is heading towards a sustainable decrease to 2%," underscoring the necessity for tangible signs of inflation easing. The current FFR stands at a 23-year peak, significantly influencing lending procedures throughout the United States.

The elevation of the FFR has led to increased mortgage rates, subsequently amplifying the borrowing costs for individuals seeking to acquire homes. Similarly, auto loans, personal loans, and other forms of installment credit, which typically align with the prime rate closely associated with the FFR set by the Fed, are witnessing an uptick in rates. Credit cards, directly tied to the prime rate, adjust alongside the FFR benchmark. Speculations persist regarding the duration during which the U.S. central bank will uphold the heightened FFR, yet a considerable segment of the market anticipates a shift to occur by at least 2024.