With the expectation that the Federal Reserve will announce an interest rate cut Wednesday, Wall Street instead will be looking for any clues for the direction the central bank plans to take for the rest of the year — and how much of that is due to pressure from the White House.

“Rather than the actual decision of a rate cut on Wednesday, the important matter is really the discussions surrounding that and … the committee’s view on where they think the economy is headed,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Some analysts are forecasting that this week's meeting will kick off a stretch of more dovish sentiment among policymakers, with as many as two more rate cuts taking place this calendar year. Others predict that the Fed will communicate a one-and-done message, framing a single rate cut as insurance against a downturn.

“The data for the weeks after the last Fed meeting have improved dramatically,” Jamie Cox, managing partner at Harris Financial Group, said. Cox ticked off GDP, retail sales and consumer consumption, jobless claims and the unemployment rate. “These things are stable and in many instances improving. The hill to climb to justify rate cuts is getting steeper.”

Another key indicator, consumer confidence, surged to its highest level this year, the Conference Board reported Tuesday.

Sam Dunlap, senior portfolio manager at Angel Oak Capital Advisors, said the Fed will likely make the case that, in spite of the strong labor market and stocks hitting record highs, persistently low inflation needs to be addressed through lower rates.

“The good news for the Fed is they have a lot of wiggle room as far as the inflation data goes,” he said.

Analysts say President Donald Trump's protectionist trade policies are both the cause and the effect behind lower interest rates.

“Trump wants headroom to fight the trade wars,” Cox said. “That’s what this has always been about.”

Trump perceives looser monetary policy as a tool he can wield in trade battles, while current and prospective tariffs have crimped business growth.

“The Fed is clearly concerned about some of the slowdown in the growth data due to trade, and Trump is the catalyst for that,” Dunlap said.

“Business investment was strongly negative, and when you read earnings reports, there’s a great deal of concern among international companies,” said Dan North, chief economist at Euler Hermes North America.

The potential trap the Fed could find itself in, market participants warned, is creating the appearance of capitulating to the president — without appeasing him.

“Lowering interest rates into an environment that’s improving is not really needed. So what is the Fed signaling, exactly? It creates more confusion,” Cox said. “If they lower now and data continues to improve... many may wonder if this was placating the president.”

Indeed, the president didn’t even wait for Wednesday’s expected rate cut before criticizing it, saying, “A small rate cut is not enough, but we will win anyway!” in a Monday tweet.

“I wouldn’t expect him to relent on the verbal pressure,” North said. “The optics are not great,” he added. “It does call into question the Fed’s independence, despite what Powell has said.”

This dynamic has more significant, and more alarming, ramifications, Cox said. “The concept that the Fed may be bowing to political pressure is not a good one. It’s not a good look.”

A single cut would be unlikely to elicit scrutiny from lawmakers, Cox said, but if the Fed lays the groundwork for a series of cuts, that could be another story.

“The danger in all this is that the Fed lives on independence. If the Fed is viewed by Congress as giving in to the president, that opens them up to more oversight by Congress, and that is dangerous territory,” he said. “This only makes their case stronger that the Fed needs increased oversight and that, I believe, is the most dangerous game being played here.”