Federal Reserve holds interest rates steady as inflation remains above 2%
The Fed said on Wednesday that it will keep its benchmark interest rate unchanged, and after the start of a series of tax reduction rates last fall, it reduces the cost of lending in individuals and enterprises.
Fed explain It will keep the federal capital interest rate at 4.25 % to 4.5 %. The decision was that the tax rate of the central bank’s trimming rate at the beginning of September 2024, the interest rate reduced the federal fund interest rate-banks’ fees to collect short-term loans-reduced a percentage point.
The suspension is a first -class decision since President Trump returns to his office on January 20, because economists predict that the central bank may take a treatment attitude. In view of some people (such as higher) tariffs, it can prove inflation.
The Federal Reserve’s stable decision reflects stubborn US inflation, which remains close to 3 % each year. This has caused people’s concerns, that is, the additional reduction price may re -increase the price, which makes it more difficult to achieve the 2 % goal of the Federal Reserve. It is worth noting that the Federal Reserve deleted a line from a December statement to express its belief that inflation has “made progress”.
Lindsay Rosner, the person in charge of Goldman Sachs Asset Management Multi -Man Fixed Investment Investment, pointed out: “Press the pause buttons.” Reference to progress, so as to propose the next speed. “
look Manage your money More information about the U.S. interest rate action.
At the same time, tired inflation consumers will not get much relief from still high borrowing costs, especially if the Federal Reserve reduces additional tax rates later in 2025, just as many economists and Wall Street analysts predict forecast That’s the way. In the case of the Fed’s pause button, even if more and more families work hard to pay the bills, consumers are unlikely to see a reduction in loan fees on credit cards or other forms of debt.
“(L) Middle -income families are facing growing pressures, which can be proven by increasing increase in credit cards and automatic loans,” Joe Gaffoglio, CEO of Mutual Capital Management, USA, said in an email.
When will the Fed reduce the rate?
According to economists who vote for financial data companies FactSet, the Fed may delay the reduction of tax reduction. This means that the central bank is expected to maintain interest rates at the next meeting on March 19.
“If the Federal Reserve will not be reduced in the next few months, we suspect that the window will be closed,” said Paul Ashworth of Capital Economics in a report. “Although the market is still reduced in the second half, we believe that as the inflation rate drops to 3 %, a series of tariffs will prevent this.”
Although the inflation rate fades from 9.1 % in the 40 years in June 2022, Rise 2.9 % Due to the high price of gasoline, in December in December, it increased by 4.4 % over the last month, and food and housing increased by 4.4 %.
The Fed described the labor market as “stable” in its statement, and the unemployment rate “stabilized at a low level in recent months.” Even so, the Fed is still closely monitoring the weakness of the labor market, while the Central Bank pointed out that rising unemployment rate last fall was one of the reasons for choosing interest rates at that time.
Bangerate’s chief financial analyst Greg McBride pointed out in an email: “The Fed will suddenly weaken in the next few months to prevent the weakening of the material that suddenly weaken suddenly in the next few months.”
He added that when the tax rate was reduced, it was unclear from the Fed’s statement.
“They did not show any signs in the statement after the meeting that at the next meeting in March, they may restore the tax rate.” “As long as possible, a large number of good inflation data is needed to enable us Arrive there “
