The US Federal Reserve concluded its two-day monetary policy meeting on Wednesday and announced that it would keep the target range for the federal funds rate unchanged between 4.25% and 4.50%. This marks the fourth consecutive time the Fed has decided to hold interest rates steady.
Key Points from the Federal Open Market Committee (FOMC) Statement
Economic Activity: Recent indicators show that US economic activity continues to expand at a steady pace.
Labor Market: The unemployment rate remains low, and the labor market situation is relatively stable.
Inflation: The inflation rate is still slightly high, although it has shown some signs of cooling.
Uncertainty: The economic outlook for the US remains highly uncertain, with the FOMC prepared to adjust its monetary policy stance as needed.
Economic Forecasts
The Fed’s updated economic forecasts indicate that officials have lowered their growth expectations for the US economy this year and next. Specifically, the median forecast for this year’s economic growth rate has been revised downward from 1.7% to 1.4%.
Impact of Tariff Policy
Federal Reserve Chair Jerome Powell highlighted at a press conference that the impact of the Trump administration’s tariff policy on end consumers has begun to show and is expected to become more pronounced in the coming months. This underscores the ongoing concerns about the potential for higher inflation and economic uncertainty due to trade tensions.
Future Outlook
The Fed will continue to monitor economic indicators closely, particularly inflation and employment data, to determine the appropriate path for monetary policy. While the current stance is to maintain rates, future adjustments will depend on how the economic outlook evolves, especially in light of ongoing trade negotiations and geopolitical uncertainties.
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