The Federal Reserve decided to keep interest rates steady on March 19, 2025, while still anticipating a rate cut of 0.5% by the end of the year. Fed Chair Jerome Powell emphasized that the central bank is not rushing to make any changes, citing unusually high uncertainty about economic conditions, particularly due to the Trump administration’s tariffs. Powell noted that weaker economic growth and rising inflation require conflicting policy responses, but the current stance is deemed appropriate to manage these risks. The Fed raised its inflation forecast for the year to 2.7%, up from 2.5%, while revising down its economic growth projection from 2.1% to 1.7%, with a slight increase in unemployment expected. The outlook for 2025 is muddled, and most policymakers share concerns over higher inflation and lower growth risks. Stock markets responded with slight gains, and U.S. interest rate futures suggest a strong possibility of rate cuts by June.
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