The Federal Reserve has decided to keep its benchmark interest rate unchanged in a range of 4.25% to 4.5% as it assesses economic stability and persistent inflation. This decision means mortgage rates will likely stay around their current levels, influencing the spring homebuying season. Economic uncertainty, compounded by the effects of fiscal policy and tariffs, continues to create fluctuations in economic outlooks. The Fed's inaction indicates a cautious approach while it observes longer-term bond yields and their relation to economic expectations.
The Fed's policy rate remains a whole percentage point lower since its big, initial cut in September. Yet in that time, economic and policy changes have caused views about what's ahead for the economy to fluctuate widely, and interest rates reflect this uncertainty.
The Fed's decision to stand pat comes as Chair Jerome Powell and his fellow policymakers watch cautiously to gauge the impact of President Donald Trump's fiscal policy and tariffs, which have roiled the stock market and increased uncertainty about the economy.
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