Federal Reserve Maintains Rates Amid Global Economic Context
The Federal Reserve keeps interest rates steady, signaling potential cuts later this year, as global economic outlooks shift with various central bank decisions.
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Beijing has made boosting domestic consumption a top policy priority this year to cushion the impact from an escalating trade war overseas.
China's central bank follows U.S. Fed in keeping rates steady as tariff threats pressure yuan
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The UK economy is widely seen to be underperforming and global factors, such as US trade tariffs, are having an indirect impact on the UK.
Bank of England expected to hold interest rates at 4.5%
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Today's unaffordable housing market isn't just a result of high mortgage rates.
Mortgage Forecast This Week: Fed Holds Rates Steady Amid Economic Uncertainty
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One of President Donald Trump's key policies could trigger higher inflation in the future — or even a recession.
'High uncertainty': Trump appointee blames president’s 'turmoil' for sluggish economy
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I think we all just read the news every day and feel like there is very little predictability in U.S. economic policy right now, which is what has been roiling markets.
US Economic Policy Unpredictable: Smart on Powell, Trump
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Inflation on household staples had cooled in February, per the Bureau of Labor Statistics, before Trump's plans for tariffs on Canada, Mexico and China spooked the market and members of his administration.
"Progress may be delayed": Powell blames stubborn inflation on Trump tariffs
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Tax law and tax administration are moving in opposite directions, leading many in Washington to worry about the collection of federal revenues, which already fall short by hundreds of billions of dollars per year.
Trump tariffs complicate Fed outlook
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The projections underscore the tight spot the Fed may find itself in this year: Higher inflation typically would lead the Fed to keep its key rate elevated, or even raise rates.
Federal Reserve Keeps Key Rate Unchanged
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The rally followed weeks of sharp and scary swings for the U.S. stock market driven by uncertainty about President Donald Trump’s trade war.
How major US stock indexes fared Wednesday, 3/19/2025
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Powell warns inflation is sticking around thanks to Trump's tariffs
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However, it also noted “high uncertainty” surrounding the effects of the White House’s actions on the economy.
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The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point.
Trump tariffs partly to blame for higher prices: Fed Chair Powell
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Policymakers now expect the nation's gross domestic product — the total output of goods and services — to expand 1.7% this year, down from their December forecast of 2.1%.
Federal Reserve holds interest rates steady, but trims economic growth outlook
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Policymakers at the Fed expect inflation to increase by an average rate of 2.7% this year, according to projections released on Wednesday, up from a previous estimate of 2.5%.
Federal Reserve cuts US economic growth outlook amid Trump tariffs
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The central bank also expects the unemployment rate to rise to 4.4 percent and inflation to edge up to 2.7 percent by year's end.
Fed sharply reduces 2025 growth projection, marks up inflation
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The Fed maintains a dual mandate of full employment and price stability.
Federal Reserve Leaves Interest Rates Unchanged for 2nd Straight Meeting
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Notably, there was a significant spike in inflation during former President Joe Biden’s four-year term, which led to many Americans having difficulty making ends meet.
Federal Reserve Staying The Course … For Now
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The Fed is trying to assess the overall economic effect of those tariffs along with the administration's efforts to curb immigration, lower taxes, slash federal spending and roll back regulations.
The Fed holds interest rates steady as Trump's trade agenda sparks uncertainty
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Prior to Wednesday’s meeting, analysts largely expected the Fed to hold off on interest rates for at least the next few months as trade war tensions threaten to reheat inflation.
Fed leaves interest rates unchanged as it warns on growth, inflation
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The decision to extend the rate cut pause was widely expected, though cracks are starting to surface in the economy.
Federal Reserve makes rate cut decision as concerns grow about economy
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The tariffs, however, are likely to both push up inflation as manufacturers and retailers pass much of the added cost to consumers, and dampen growth by sapping Americans’ buying power.
Fed keeps interest rates unchanged, sticks with forecast for 2 rate cuts in 2025
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While the outcome of this meeting was broadly in line with market participant expectations, it clearly shows the conundrum the Fed has in balancing growth and inflation expectations.
Federal Reserve leaves key interest rate unchanged amid uncertainty over economy, inflation
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Fed Leaves Rate Unchanged, Projects 2 Cuts in 2025
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The upheaval has created a more difficult backdrop for the Federal Reserve to navigate as it sets borrowing rates for the U.S.
Federal Reserve to make first interest rate decision since Trump's policies set in
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Jerome Powell is expected to stand firmly on the economic sidelines until Trump's tariff plan becomes clearer.
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Summary
The Federal Reserve has opted to maintain interest rates at 4.25%-4.5%, with Chair Jerome Powell suggesting potential cuts amid rising inflation and economic uncertainty. The decision has been positively received, contributing to a stock market rally, with the S&P 500 up 1.1%. This follows a similar stance from the Bank of England, expected to hold its rates at 4.5% next week amidst concerns over inflation and economic slowdown. Analysts predict two further cuts for the Bank of England by year-end. Meanwhile, China's central bank held its lending rates steady, balancing growth efforts against trade frictions.
Perspectives
The Federal Reserve has decided to maintain its interest rates at a range of 4.25% to 4.5% while expressing concerns about rising inflation and slower economic growth due to the effects of President Trump’s tariff policies.
Recent projections from the Fed show an anticipated inflation rate of 2.8% for this year, up from a previous estimate of 2.5%, signaling increased uncertainty in the economic outlook.
Fed Chair Jerome Powell has highlighted the significant role of tariffs in driving inflation and emphasized the importance of a cautious approach in policy-making given the high levels of uncertainty surrounding recent economic changes.
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