Federal Reserve Holds Key Interest Rate Steady Amid Uncertainty About The Economy’s Future | Global News Avenue

As widely expected, the Fed keeps its key interest rates stable, waiting for the economy to signal its trajectory in the uncertainty over the impact of President Donald Trump’s trade war.

The Fed’s policy committee will have Fed funding interest rates range from 4.25% to 4.5% since January. Key interest rates affect the borrowing costs of various loans, high enough that Fed officials believe will drag on inflation and economic growth.

The goal of Fed officials is to get interest rates on Fed funds high enough to reduce inflation, which has been stubbornly surpassing the Fed’s 2% age target in recent months, but not high, but not weakening business, so much that the unemployment rate has risen sharply. Trump’s Trade Partner Tariff Movement Complex the appearance Because the Fed can Slowing the economy and boosting inflationAccording to economic forecasters. It has Cause uncertainty Among business leaders and consumers Damage to the economy.

“The uncertainty about the economic outlook has increased,” the Federal Open Market Committee said in a statement accompanied by the interest rate decision.

The Fed’s outlook for the economy has been deteriorating since the last time officials predicted inflation, unemployment and interest rates in December, indicating an increasing risk of “stagnation.”

At Wednesday’s meeting, FAP members rose to 4.4% at the end of the year, up from 4.3% in December; inflation, measured by core personal consumption expenditure, rose 2.8% over the year, up from 2.5% forecast in December; GDP rose 1.7%, down 2.1% from the recent forecast.

The prospect of the Fed’s downgrade this year remains unchanged: Central bank officials still expect Fed funding rates to drop by half a percentage point by the end of 2025, ranging from 3.75% to 4%.

In addition to tariffs, another round will expire on April 2, Fed Chairman Jerome Powell said the Fed is paying attention to Trump’s proposed tax cuts, cutting federal regulations and Suppress Immigration. All uncertainty, he said, is keeping the Fed off the market.

“The new government is implementing policy changes in four different areas: trade, immigration, fiscal policy and regulation. The net effect of these changes is crucial to the economy and on the road to monetary policy. Although in some recent areas, especially trade policy, in particular uncertainty about these changes and their impact on the appearance of the economy,” Powell said. “As the prospects evolve, we focus on separating the signal from the noise.”

Updated, March 19, 2025: After publication, this article has been updated, including comments from a press conference by Fed Chairman Jerome Powell.