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Illustration: Sarah Grillo/Axios

There's never been a Federal Reserve interest-rate decision quite like this, with the central bank facing public criticism from the president and a whipsawing stock market.

Why it matters: Market watchers agree that one of the greatest threats to the smoking economy is a misjudgment by the Fed on how to manage the record-breaking economic expansion. Trump's response to any rate hike is likely to be angry, losing the Fed's precious credibility among the president's supporters.

Later today, Jerome Powell will likely announce the fourth rate hike since he took over the Fed in February. The new target rate, 2.25–2.50%, will be the highest in a decade.

Flashback: Trump slammed Powell hours after the Fed announced a rate hike in September.

  • No other president has commented on monetary policy as much as Trump. Don't be surprised if there's a similar reaction from him this time.
  • Powell has taken pains to emphasize that his decisions are data-dependent. Trump, by contrast, would rather trust his gut on monetary policy, telling Powell yesterday to ignore "meaningless numbers" and "feel the market."

After Powell softened his rate hike stance last month, some economists expect a "dovish hike" — or a rate hike coupled with a more cautious tone about the economy, hinting that the Fed may hike rates fewer times in 2019 than previously indicated.

  • This is the best-case scenario for the stock market, which responds positively to a less aggressive Fed.

The odds: There is a roughly 31% chance that the Fed doesn't raise rates at all. That wouldn't necessarily be better news than a "dovish hike."

  • A rate pause would jeopardize the Fed‘s credibility. It would leave the central bank wide open for a victory lap from Trump and raise questions about whether the Fed has become politicized.
  • The move could also spook the markets. "Investors would assume the Fed had knowledge of some impending crisis about which they are unaware," says Nicholas Colas, co-founder of DataTrek Research.

The bottom line: No other Fed chairman has faced a challenge like the one Powell is facing. When Powell fields questions from reporters after the policy decision this afternoon, expect him to defend the Fed's political independence, maintain an upbeat (but not too upbeat) tone about the economy, and assure investors the Fed is not on a fixed path to hike interest rates even more.

Go Deeper:

Go deeper

Latinas head for the federal bench

Photo illustration: Annelise Capossela. Photos: Tom Williams, Caroline Brehman/CQ-Roll Call, Inc via Getty Images

A number of Latina judges recently have been nominated to U.S. federal courts, which for many years saw few Hispanics and Afro-Latinos on their benches.

Why it matters: Decisions made in courtrooms can affect people in ways large and small, with cases on voting rights, abortion, healthcare and more playing out in courts across the country.

Updated 2 hours ago - Politics & Policy

Omicron dashboard

Illustration: Shoshana Gordon/Axios

  1. Health: Americans shrug off Omicron, Axios-Ipsos poll finds — CDC director says number of U.S. Omicron cases "likely to rise."
  2. Vaccines: Omicron gives a shot to boosters — U.S. announces $400M for global COVID vaccine distribution — Vaccine mandates lose steam in the U.S. while Europe doubles down.
  3. States: Gov. Hochul will order some NY hospitals to halt elective surgeries — Nevada to impose insurance surcharge on unvaccinated state workers.
  4. World: EU drug regulator backs mixing COVID vaccines — Poor global equity likely in COVID pill access — CDC raises travel advisories for France, Portugal to highest level amid COVID surge.
  5. Variant tracker: Where different strains are spreading.

Mark Meadows will stop cooperating with Jan. 6 panel, attorney says

Photo: Chris Kleponis/Polaris/Bloomberg via Getty Images

Former White House chief of staff Mark Meadows will no longer cooperate with the House select committee investigating the Jan. 6 Capitol insurrection, his attorney told Fox News Tuesday.

Why it matters: Meadows, who failed to appear before the panel last month, is believed to have insight into former President Trump's role in efforts to stop the certification of President Biden's election win.