The Federal Reserve said on Wednesday that it would leave its benchmark rate unchanged, which breaks the brake when reduced the cost of lending for individuals and businesses after the previous decline begins.
Fed Said This will maintain the Federal Funds Rate at its current range from 4.25% to 4.5%. This decision has come after trimming the rates by the Central Bank, which started in September 2024, which has pushed the rate of federal money down-by banks charge each other for short-term loans-from one percent point .
The first rate of Fed since President Trump returns to office on January 20, as economists have predicted that the central bank predicts that there is a possibility of a waiting-and approach to the President's economic policies, Given that some, such as higher tariffs, may prove to be inflation.
The Fed decision to keep the rates stable reflects the stubbornness of US inflation, which remains close to 3% on an annual basis. There is a concern that there may be an increase in additional rate cut price, making it more difficult to achieve a 2% target of the fed. In particular, Fed removed a line from his December statement, believing that inflation “progressed its goal”.
Lindsay Rosar, head of Multisector Fixed Income Income Income Income Inkading at Goldman Sachs Asset Management, said, “Pressing the poses button.” ,[T]He would like to look forward to further progress in FOMC inflation data to cut the next rate, highlighted from the fact that he removed the context on the progress of inflation. ,
Meanwhile, inflation-consumers will still not get a lot of relief from the cost of high borrowing, especially if the Fed prevents the additional rate cut later in 2025, as is the forecast of many economists and wall street analysts. With the Fed the Pose button hitting, it is unlikely that consumers will see the cost of borrowing less on credit cards or other forms of loan, even more families struggle to pay their bills.
,[L]In an email, “And due to increasing pressure in medium-or-I houses, due to increase in credit cards and auto loans delyncans,”
When will the rate of fed cut?
According to economists voted by the financial-detta firm factset, the Fed may cut rates until the May 7 meeting. This means that the Central Bank is expected to keep the rates stable in its next meeting on 19 March.
While inflation has reduced by 40 years high in June 2022 to 9.1%. Increased 2.9% Due to higher prices on gasoline, one year-on-year basis, which increased by 4.4% from the earlier month, as well as food and housing.
In his statement, Fed described the labor market as “concrete”, with an unemployment rate that “has stabilized low levels in recent months.” Nevertheless, Fed is closely monitoring the labor market for signs of weakness, the Central Bank pointed to an increase in unemployed rate, as this is one of the reasons that it was opted to cut the rates at this time.
“Fed will keep its options open, when the bank's chief financial analyst Greg McBrid was noted in an email, the labor market will suddenly weaken in the event of a sudden weakening in the coming months.
He said that when the next rate can be cut, it is not clear from the statement of Fed.
“He did not indicate in his post-meting statement that there is a possibility of rate cut in the next meeting in March,” McBrid said. “Whenever this can happen, we will have a run of good inflation data to reach there.”