At the Federal Open Market Committee meeting, the Federal Reserve decided to keep interest rates at a target range of 4.25% to 4.5%, unchanged since December. Chair Jerome Powell emphasized patience as the Fed awaits clarity on President Trump's economic plans and their potential inflation impacts. Market experts echoed the sentiment of the Fed's patience, though they noted a desire for clearer guidance in upcoming meetings. Additionally, Fed policymakers forecasted potential increases in unemployment and slower economic growth compared to their previous December predictions.
We'll be adapting as we go," Federal Reserve chair Jerome Powell said. He noted that the Fed does not need to rush to make policy adjustments and "is well positioned to wait for clarity" on President Donald Trump's economic plans, including tariffs.
Everybody is forecasting some inflation effect from tariffs," Powell stated. "We're going to have to wait and see all of that.
I continue to admire the Fed's patience as we all await further clarity on the feed-through effects of trade policy right now, but I think investors will be craving clearer direction out of the FOMC meetings ahead," stated Elyse Ausenbaugh.
What happens in the economy in the next three months will be the driver of future rate movement from the Fed," stated Melissa Cohn.
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