Federal Reserve officials predict that inflation will worsen, projecting a rise to 3% by year-end while still maintaining their forecast for two interest rate cuts this year. At their latest meeting, they left the key interest rate unchanged for the fourth consecutive time, citing solid economic expansion. However, growth is expected to decelerate to 1.4%, and unemployment may rise to 4.5%. The Fed's concern about tariffs affecting inflation has prompted this cautious approach, despite a bleak outlook for the economy.
Fed officials are projecting worsening inflation while still anticipating two interest rate cuts by the end of this year, maintaining their earlier March forecast.
With the economy expanding at a 'solid pace,' changes in the Fed's rate could significantly influence borrowing costs across various sectors, even amid declining growth projections.
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