FOMC Holds Firm on Rates, Powell Sees No Hurry for Cuts

• The FOMC unanimously held interest rates unchanged at 4.25%-4.50%.
• Powell said policymakers are in no hurry to lower rates.

The U.S. Federal Reserve kept the interest rates unchanged on Wednesday, maintaining the benchmark lending rate within the range of 4.25% to 4.50%. Fed Chair Jerome Powell underlined that the policymakers are in no rush to lower rates.

Besides, he stated that any adjustments would depend on further improvements in inflation and labour market conditions. After a series of rate cuts during the second half of 2024, the Fed is now in a wait-and-see mode.

Powell also pointed out after the FOMC that in view of the continued economic strength, there is no urgency to change monetary policy at this time. In a post-meeting press conference, the Fed Chair stated:

“With our policy stance significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance.”

In addition, the decision to interrupt rate reductions occurs when inflation, though still moderate, is still higher than the Fed’s longer-run target. The Federal Open Market Committee (FOMC) observed that inflation has otherwise trended sideways in the recent past and helped reinforce the need for a cautious stance.

The Fed after the FOMC indicated that current interest rate effects are no longer providing the same level of economic control as before. Furthermore, this is the first interest rate judgment made since Donald Trump became the 47th President of the United States.

Powell and his team will undoubtedly take into account forthcoming economic actions within the Trump administration, which include trade, taxes, and the regulatory environment that may impact future monetary moves of the Fed.

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