While bringing the pivot to a standstill after cutting 100 basis points since September, the US Federal Reserve kept interest rates steady at 4.25%-4.5%, as expected, but pushed the market's expectation of the next rate cut to the June meeting."Our baseline is for the Fed to remain on hold for upcoming meetings, before normalizing policy mildly later in the year. But we do not rule out no Fed cuts either. However, we reckon there is somewhat a political angle to this," said Emkay Global's Madhavi Arora.Fed Chair Jerome Powell reiterated that if inflation remains firm rather than gradually easing as the Committee anticipates, they could keep policy on hold at current levels for a longer period. Conversely, if the labor market shows signs of unwanted weakening, they could ease rates further.Analysts say that the uncertainty around rate cuts has now become political, as President Donald Trump begins his second term, with expectations that he will advocate for lower interest rates.“Trump’s return to the White House raises concerns over economic stability, with expectations that the administration will push for more accommodative monetary policy,” says Nigel Green, CEO of global financial giant deVere Group.The Trump administration has already signaled its preference for lower interest rates, but that does not mean the Fed will — or should — comply without considering the economic consequences, he said."Policies such as tariffs and mass deportations could further complicate the inflation outlook and force the central bank into a defensive stance. The economic landscape is fraught with risk, and while fiscal stimulus may boost short-term growth, the long-term effects could be far more destabilizing," he said.Traders are pricing in around 44 basis points of cuts by year-end, down from approximately 48 basis points before the Fed's statement. This reflects declining confidence that the U.S. central bank will implement two 25-basis-point rate reductions this year.Impact on marketThe initial market reaction was a cross-asset selloff, but markets largely pared losses after a relatively dovish press conference. The dollar index remained around the 108 mark, staying above last week's one-month low of 107.5.The yield on the US 10-year Treasury note rose by as much as 5 basis points before paring some gains to settle at 4.56% on Wednesday.The Dow Jones ended 0.31% lower, while the Nasdaq fell 0.5% overnight."The policy was fully in line with expectations, rendering no shocks to the market. The Fed expects to deliver two rate cuts in 2025, which could begin in late Q2. On the domestic front, the RBI has started easing liquidity, and the rationale for a 25bps rate cut in February is compelling," said Ankita Pathak, Chief Macro and Global Strategist at Ionic Wealth by Angel One.Also read | Capex hike or consumption boost in Budget 2025? 5 things Nifty bulls expect from Nirmala Sitharaman