{"id":262370,"date":"2025-03-19T18:44:06","date_gmt":"2025-03-19T18:44:06","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/03\/19\/federal-reserve-holds-rates-steady-despite-economic-uncertainty\/"},"modified":"2025-03-19T18:44:06","modified_gmt":"2025-03-19T18:44:06","slug":"federal-reserve-holds-rates-steady-despite-economic-uncertainty","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/03\/19\/federal-reserve-holds-rates-steady-despite-economic-uncertainty\/","title":{"rendered":"Federal Reserve holds rates steady despite economic uncertainty"},"content":{"rendered":"
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The US central bank has kept interest rates unchanged for the second time in a row, while warning that economic uncertainty had increased.<\/p>\n

The decision, which was widely expected, left the Federal Reserve’s benchmark interest rate hovering around 4.3%, where it has stood since December.<\/p>\n

Forecasts released by the bank also showed policymakers expect weaker growth and faster price inflation this year than they did just a few months ago.<\/p>\n

It comes as concern rises about the effect US President Donald Trump’s tariffs are having on the economy.<\/p>\n<\/div>\n

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Since taking office in January, Trump has announced blitz of new tariffs while also calling for big cuts to taxes, regulation, and government spending.<\/p>\n

Economists have warned that some of those policies could cause prices to rise, at least in the short-term, and raise uncertainty for businesses.<\/p>\n

Analysts say the concerns have also helped to drive a sell-off in the stock market, with the S&P 500 falling 10% from February back to levels last seen in September.<\/p>\n

However, in its rate announcement, the Fed said economic activity had continued to expand at a “solid” pace.<\/p>\n

Federal Reserve chairman Jerome Powell has previously said he saw little risk to taking a patient approach, while waiting for more certainty about the impact of White House policies.<\/p>\n

But the dynamic has added to the challenge facing the Fed, which has spent much of the last three years trying to keep prices stable and avoid economic downturn.<\/p>\n<\/div>\n

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It hiked borrowing costs significantly starting in 2022, aiming to cool the economy and ease the pressures pushing up prices. <\/p>\n

Inflation, the rate of price increases, has since fallen to 2.8% as of February, but remains above the bank’s 2% target.<\/p>\n

Recent surveys also suggest that public expectations for inflation have risen, which could make the bank’s job stabilising prices more difficult.<\/p>\n

Households expecting prices to rise have incentive to buy now. But that can fuel inflation, as firms respond to the increased demand by raising prices further. <\/p>\n

“The problem the US faces is that inflation remains a primary risk and is showing signs of consumer expectations becoming unanchored from the 2% target,” said Lindsay James, investment strategist at Quilter.<\/p>\n

“Leading indicators of demand may be slowing in the US, but inflation persists and risks spiralling if the proposed economic policies continue.”<\/p>\n<\/div>\n

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The forecasts showed policymakers now expect inflation to stand at 2.7% at the end of this year, up from the 2.5% they had predicted in December. <\/p>\n

They are also expecting growth of just 1.7% this year, down from the 2.1% previously anticipated.<\/p>\n

Policymakers are still indicating they expect to cut rates by the end of the year.<\/p>\n<\/div>\n<\/div>\n


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Getty Images The US central bank has kept interest rates unchanged for the second time in a row, while warning that economic uncertainty had increased. The decision, which was widely expected, left the Federal Reserve’s benchmark interest rate hovering around 4.3%, where it has stood since December. Forecasts released by the bank also showed policymakers […]<\/p>\n","protected":false},"author":2,"featured_media":262371,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/www.bbc.com\/bbcx\/grey-placeholder.png","fifu_image_alt":"","footnotes":""},"categories":[604],"tags":[484,7559,3220,6829,16218,8656,9177],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/262370"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=262370"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/262370\/revisions"}],"predecessor-version":[{"id":262372,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/262370\/revisions\/262372"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/262371"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=262370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=262370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=262370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}