Fed keeps interest rates unchanged

Federal Reserve has decided to keep interest rates at 4.25%-4.50%, as analysts had already predicted. February’s meeting had also left rates unchanged, but prior to that, Fed had already executed three consecutive rate cuts: a 50 basis point cut in September, and two 25 basis point cuts at the beginning of November and in December.

Fed Chairman Jerome Powell, during a press conference following the two-day meeting, downplayed concerns about the trade war’s economic consequences initiated by the Trump administration and stated that the inflationary impact of tariffs might be only transitory.

Powell's statements reassured those who feared that the tariffs’ impact could weaken U.S. economy to the point where Fed would be unable to implement further rate cuts. Powell does not view the decline in confidence from businesses and consumers as a major concern and stated that concrete data shows the economy remains solid. Furthermore, Fed plans to apply two more interest rate cuts in 2025.

According to the latest reports, consumers expect a price increase over the next five to ten years, with an annual rate of 3.9%, the highest in the last thirty years. However, for Fed Chairman, these are data points related to an isolated case.

U.S. President Donald Trump responded to Fed's decision by stating that the U.S. central bank should reduce rates in order to ease the economy.