Federal reserves Wednesday announced that it would be stable interest rates at 4.25-4.5%, as the Central Bank continues to work on equilibrium inflation concerns with the signs of decorating the US economy.
While inflation cooled from its 2022 high, recent data did not provide sufficient persuading to start reducing rates once more. But the Fed message was a little different this time, warning of growing risks and greater unemployment and inflation and raising the possibility of the chance scenario.
“Although the swings in net exports influenced the data, recent indicators suggest that economic activity continued width at a solid pace”, Fed said in a statement. “The unemployment rate stabilized at a low level in recent months, and the labor market conditions remain solid. Inflation remains a little elevated.”
Federal spare chairs Jerome Powell said that the Central Bank remains dedicated to price stability and complete employment – saying that he wanted to prevent the level of price of the continuous inflation problem.
Risks said Greater unemployment and inflation increased, and the current policy attitude leaves the Fed “well positioned” to resolve economic development. “
The prices of American shares fell on Wednesday, but Dow managed to adhere to mild gains after a widely expected move. The S & P 500 dropped 0.5% in 15 minutes after release, and American state yields expanded their fall.
Fed Decision came against the background of slowing economic growth and still sticky inflation. The American economy agreed by 0.3% in the first quarter of 2025. year, while the labor market showed resistance with 177,000 jobs in April – on the face that only modestly exceeded expectations.
Basic inflation, measured by the preferred Metric Fed, the price index of personal consumption, continues to hover over 2%, and by strengthening the cautious attitude to the fades.
“The very economy itself is in solid form,” Powell said. He added, however, that some laugh at journalists that “my hose tells me that uncertainty in the economy’s path is extremely elevated.”
Part of that, due to the brigging set of Tariff President Donald Trump, he announced in early April, including 145% duty in Chinese imports. While the FED does not apply directly or set fiscal or trade policy, such events influence the dynamics of inflation that goes forward – and further complicate the task of FEDA.
Powell addressed tariffs at the press conference, saying that the Central Bank will continue to “wait and see and watch” how tariff policies change over the next weeks and months. He said that Fed was comfortable in his policies position and can move quickly as needed.
Now he said, “It remains to be seen how these movements can affect future consumption and investment.” Powell, however, said that if the current tariffs maintained, they would influence inflation, economic growth and level of employment. But “effects on inflation could be a short life, which reflect a one-off pricing shift.”
But the contrary could be true.
“It is also possible that inflationary effects could instead be more persistent,” Powell added. “Avoiding these outcomes will depend on the size of the effects of tariffs, how long it takes to fully pass their prices and ultimately on maintaining long-term energy expectations well anchored.”
One person who will not be satisfied with Powell announcement: Trump. The president called Powella a “Big loser” IA “Total stiff” And floated the idea of trying to release the head of the central bank – before you walk that idea.
Powell said on Wednesday that Trump comments do not affect his job on the Fedger:
“We will always do the same thing, which we will use our tools to encourage maximum employment stability and prices in favor of the American people. We will always consider the risks, the look, the balance of risk. And that’s all we’ll consider.
“So, it doesn’t really affect our business or the way we do.”
After the federal reserve and powellene the upcoming remarks, analysts expect the Fed to continue to stand interest rates, unless the inflation data show a clearer trend. Since Fed said that politics remains in a good place and that it is not in a hurry, the possibility of cutting interest rates is a tall heaven.
The Central Bank said that “will continue to monitor the implications of incoming information for the economic prospects” and “would be ready to adjust the position of monetary policy as needed if risks arise which could obstruct the achievement of the goals of the board.”
2025-05-07 19:37:00
