Fed-Chef Jerome Powell

Economic uncertainty: US Federal Reserve Fed continues interest in the interest rate

The US Federal Reserve Fed again dispensed with further interest reductions on Wednesday. As from analysts, the Federal Reserve expected to leave the interest rate unchanged between 4.25 percent and 4.5 percent. Central Bank boss Jerome Powell justified the decision with the currently “unusually high” uncertainty. The Fed “not a given course” is pursuing but adapting its monetary policy to the circumstances, he emphasized. According to its forecast of December, the Fed said to record the two interest reduction predicted for 2025.

The decision was not unanimous. A governor opposed the opinion of his colleagues for further suspension of the interest rate reduction.

The central bank also lowered the growth forecast for the current year and raised inflation expectation. The price increases are “a good part” to the customs policy of President Donald Trump, said Powell. In 2025 there may be a “delay in further progress” with regard to the decline in inflation, he added. Inflation in the United States was still significantly higher than two percent in February.

According to Powell, the risk of recession also increased. “It was said two months ago that the likelihood of a recession was extremely low. Now it is higher, but it is not high,” said the central bank boss.

In September, the FED had started interest in interest in the face of the sunken inflation and a stable US labor market and then gradually reduced the key interest rate by a full percentage point. At the end of January she took a break, although US President Donald Trump asked her to reduce interest.

Since taking office on January 20, Trump has imposed or announced a variety of tariffs and partially suspended it. It mainly uses tariffs as a means of lining against other countries.

AFP

  • Interest rate

  • US central bank

  • Federal reserve system

  • Jerome Powell

  • inflation

  • Donald Trump

Bryce

I am Bryce, a writer for Southshore Journal, and I bring my passion for general news to our dynamic team. My commitment to editorial quality and the responsibility of informing guide my daily efforts. Working in collaboration with our talented journalists and editors, I strive to provide accurate and current information for our attentive audience.