The Federal Reserve kept its benchmark interest unchanged, leaving it at a range of 4.25% to 4.5%. It is the second straight time the Federal Open Market Committee (FOMC) has opted to keep rates unchanged, following three straight cuts in 2024.
The FOMC said that it expects to make five 25-basis-point interest rate cuts, with two coming this year, followed by two more in 2026 and one in 2027. The committee cited an increase in the “uncertainty around the economic outlook” due to the potential impact of tariffs put in place by President Donald Trump and his efforts to reduce taxes and regulations while shrinking the size of the federal government.
“If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer,” Federal Reserve Chair Jerome Powell said. “If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”
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