After the Federal Open Market Committee (FOMC) meeting on Wednesday, Federal Reserve officials decided to maintain interest rates within a target range of 4.25% to 4.5%. This rate has remained unchanged since December when the Fed reduced rates by 0.25%. However, there is a possibility of rate cuts later in the year.
Federal Reserve Chair Jerome Powell mentioned in a press conference after the meeting that the Fed is prepared to make policy adjustments as needed and is closely monitoring President Donald Trump’s economic plans, particularly regarding tariffs and their potential impact on inflation.
The decision to keep rates steady was expected, with experts like Elyse Ausenbaugh from J.P. Morgan Wealth Management stating that the lack of change was not surprising. Ausenbaugh also noted the importance of clarity on trade policy effects for future rate movements.
On the other hand, Melissa Cohn from William Raveis Mortgage mentioned that if tariffs and inflation increase in the coming months, future rate cuts may be unlikely. The performance of the economy in the next few months will be a key factor in determining future rate adjustments.
In addition, Fed policymakers predicted lower economic growth and higher unemployment rates for the year compared to their December projections. This shift in forecasts indicates a more cautious approach to the economy.
Overall, the Fed’s goal remains to support low prices and full employment. The decision to keep rates unchanged follows a series of cuts in late 2019 and early 2020, showcasing the Fed’s commitment to closely monitoring economic conditions.
Source link
