Feds Promise Future Cuts, but not now

Federal Reserve Chair Jerome Powell announced a hold on current interest rates, but suggested there will be two rate cuts this year.

Federal reserve holds interest rates steady, signals two cuts this year amid economic uncertainty– timesofindia.indiatimes.com
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The federal reserve maintained its benchmark interest rate on Wednesday, keeping it unchanged for the second consecutive meeting, while signalling that it still expects to cut rates twice before the end of the year. However, officials acknowledged growing uncertainty in the economic outlook as inflation shows signs of persistence and growth projections weaken.

In its latest quarterly economic forecast, the Fed revised its expectations for economic growth, predicting a slower expansion this year and next compared to previous estimates. The central bank also anticipates a slight increase in the unemployment rate, projecting it to rise to 4.4% by the end of 2025. Inflation, which remains above the Fed’s 2% target, is expected to climb to 2.7% this year from its current level of 2.5%.
“Uncertainty around the economic outlook has increased,” Fed noted in its post-meeting statement, highlighting the delicate balance policymakers must strike. While rising inflation would typically prompt the Fed to keep rates elevated or even raise them, slowing growth and rising unemployment could necessitate rate cuts to support the economy.
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