The Federal Open Market Committee (FOMC) Fedheld today (19.03.2025) steadily interest rates after the two -day monetary policy meeting.
Although the Fed did not make changes to reference rates, it said in its report that the reductions were possible later in the year.
Faced with the pressing concerns about the impact that Donald Trump’s duties will have on the slowing economy, the Federal Open Market Committee that sets interest rates maintained its basic borrowing rate aimed at a range of between 4.25%-4.5%. Two -day policy meeting this week.
Together with the decision, officials have updated their forecasts on interest rates and the economy for the current year and until 2027 and changed the pace at which they reduce the reserves of bonds by the Central Bank.
Despite the uncertain impact of President Donald Trump’s duties, as well as the ambitious fiscal policy of tax exemptions and deregulation, officials said they still see another half percentage unit of interest rates by 2025.
In its statement after the meeting, the FOMC scored an increased level of ambiguity around the current climate.
“The uncertainty about economic prospects has increased,” the document said. “The Commission is watching the dangers carefully for both sides of its double command.”
The Fed is tasked with the dual target of keeping full -time and low prices.
The Commission has downgraded its collective prospects for economic growth and gave a boost up to its forecasts for inflation. Officials are now seeing the economy accelerating at a rate of just 1.7% this year, down 0.4 percentage points from the latest December forecast. In terms of inflation, basic prices are expected to rise at an annual rate of 2.8%, up 0.3 percentage points from the previous estimate.
In addition to the interest rate decision, the Fed has announced a further reduction in the “quantitative tightening” program, which is slowly decreasing its bonds in its balance sheet.
The central bank will now allow only $ 5 billion to release in revenue from US bonds expiring each month, from $ 25 billion. However, it left the $ 35 billion ceiling unchanged for mortgage mortgages, a level at which it has rarely reached the start of the process.
Fed Commander Christopher Waller was the only one who disagreed with the Fed movement. However, the announcement notes that Waller was in favor of maintaining interest rates at a steady level, but wanted to see the quantitative tightening program to continue as before.