Federal Reserve officials predict worsening inflation in the upcoming months, yet they still anticipate two interest rate cuts by year-end. The Fed maintained its key rate for the fourth consecutive meeting, citing solid economic expansion. However, they revised their forecasts, now expecting slower growth at 1.4% and a rise in unemployment to 4.5%. Officials also expressed concern that recent tariffs could exacerbate inflation. Current inflation stands at 2.1%, with core inflation at 2.5%, raising uncertainties for future economic conditions.
The Fed's decision to keep rates unchanged amid uncertainty highlights their cautious approach to managing inflation and economic growth amid tariffs and market fluctuations.
Despite forecasts of higher inflation and unemployment, many Fed officials have signaled the need to maintain stable rates while gauging the impact of current tariffs.
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