The Fed left without changing interest rates, as expected.
The Fed has been changing its policy interest rates since December 2024. The decision is driven by factors such as global uncertainty, slow economic growth and volatile inflation trends.
Fed President Jerome Powell will hold a press conference today at 9:30pm after a two-day monetary policy meeting.
At its March 2025 meeting, the Fed announced it would stabilize its policy rate from 4.25% to 4.50%, and forecast a two-quarter point rate reduction by the end of the year. Powell said at the meeting that despite geopolitical risks he would not rush and cut quickly. A statement from the FOMC stated that “if there is a risk that can prevent targets from being achieved, monetary policy stance will be adjusted as necessary.”
But President Donald Trump has repeatedly urged Powell to cut interest rates to prevent the economy from slowing down. In fact, in the first quarter of 2025, the US economy signed 0.3% per year due to the effects of the trade war. In contrast, employment data for April is positive. 177,000 new jobs have been added in the US. Core PCE inflation data remained unchanged in March. In February, this percentage rose 0.4%.
There is still uncertainty about the number of interest rate cuts throughout the year. According to Kalshi data, investors are expecting three interest rate cuts in 2025 compared to four previous estimates.
Here’s what Wall Street expects:
- Goldman Sachs: 3 cuts (July, September, November)
- Morgan Stanley: 0 discount
- Bank of America: 4 discounts
- Citigroup: 5 off
- JPMorgan & Barclays: 2 discounts
- Median FED prediction: 2 cuts
*This is not investment advice.
