The US Federal Reserve maintained interest rates as expected on Wednesday for the fourth consecutive time, amid rising uncertainty about the economic outlook. The target interest rate range remains between 4.25% and 4.50%. The Fed still anticipates a 50 basis point rate cut this year, but has slightly slowed the pace to a quarter-point reduction in both 2026 and 2027 due to expected inflation from President Donald Trump’s tariff plans.
New economic projections from the central bank present a relatively bleak picture for the US economy, marked by moderate stagflation. Policymakers expect weak growth at 1.4% this year, with unemployment rising to 4.5% by the end of 2025. Inflation is projected to reach 3%, higher than the current rate and the Fed’s 2% target. Inflation is expected to remain at 2.4% until 2026 before dropping to 2.1% in 2027.
The Federal Open Market Committee noted that uncertainty about the economic outlook remains high, despite some easing. The Fed’s economic projections were revised down from 1.7% to 1.4% growth, while unemployment forecasts were adjusted up from 4.4% to 4.5% by year-end. The labor market remains strong, supporting the unanimous decision to keep rates unchanged.
Market expectations align with the Fed’s cautious stance, anticipating a quarter-point cut in the next meeting on September 16-17. Calls from Trump for an immediate rate cut have been dismissed as inconsistent with the Fed’s goals amid tariff-related uncertainties.
— new from إرم بزنس
