The Federal Reserve kept its key interest rates in Wednesday’s checks and reversed the recent relaxation policy trend, because it studied that it might be a bumpy political and economic pattern.
In a widely expected move, the Federal Public Marketing Committee of the Central Bank remained between 4.25 % -4.5 %.
After three consecutive victories since September 2024, this decision deserves a complete percentage point, and marks the first Fed of the Federal Reserve Conference since the Federal Reserve critics. Donald Trump As a president last week, he almost immediately made his intention to know He hopes that the central bank will reduce interest ratesEssence
After the meeting, the statement abandoned some clues about determining stable interest rates. It provides more optimistic views in the labor market, and at the same time, it has deleted a key reference for the Fed’s 2 % inflation target from the December statement.
The new language wrote: “In recent months, the unemployment rate is stable at a lower level, and the labor market is still stable.” “Inflation still improves a bit.”
The stronger labor market and stubborn inflation will provide less motivation for the Federal Reserve’s relief policy. The statement once again shows that the economy “continues to expand at a solid speed.”
The latest statement of policy makers shows that people are worried about whether the progress of inflation is lowered. Officials also said that they wanted to see how the previous cuts worked hard in the economy, although most people expect the tax rate this year.
In addition, this decision is a political background against fluctuations.
In more than a week, Trump signed hundreds of administrative orders trying to execute active agenda, cutting the policy and political norms of Washington. The president has put tariffs as a tool for economic and foreign policy, but also ordered a wave of deportation to those who illegally cross the border, and proposed a series of giving up control measures.
In addition, Trump talked about his confidence last week, that is, he will reduce inflation and say that “requires” to reduce interest rates “immediately”. Although the president does not have any power except for the members of the board of directors, Trump’s statement shows that, like the finals, the relationship with policy makers may be controversial.
Compared with the 40 -year peak reached in the middle of 2022, the inflation rate has declined sharply, but the Fed’s 2 % goal is still elusive. In fact, the preferred pricing table of the Central Bank showed that the title inflation rate increased to 2.4 % at the highest level in November, and the core measures did not include 2.8 % food and energy.
Traders are likely to hold the line at this conference nearly 100 %, and they will not be cut until June. According to the market pricing at the end of 2025, about 3.9 % CME group dataEssence stock Fall after decisionEssence
According to data from Atlanta Fed, in 2024, economic growth has been stable, and consumer expenditure continues to be good during 2024. The annual growth rate of GDP in the fourth quarter was 2.3 %. With the weakening of private investment data.
The meeting also carried out changing voting works on FOMC.
Chair Jerom Powell This year, the other seven members of the board of directors joined the Chicago President Oscar Gulsby, the Alberto Musrem in San Louis, the Susan Collins in Boston, and Jeffrey Schmid in the city of Kansas. Keeping the capital interest rate unchanged is consistent.
