American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Politics

Federal Reserve takes a pause, keeps interest rates unchanged

by admin January 30, 2025
January 30, 2025
Federal Reserve takes a pause, keeps interest rates unchanged

The US Federal Reserve kept its key interest rate unchanged on Wednesday, pausing its recent easing cycle as it navigates economic uncertainty and rising political pressure.

This marks the central bank’s first policy decision since President Donald Trump returned to the White House last week, with the administration pushing for immediate rate cuts to support growth.

The Federal Open Market Committee (FOMC) maintained its benchmark borrowing rate at 4.25%-4.5%, following three consecutive rate cuts since September 2024 that totaled a full percentage point.

The decision signals caution from policymakers as they assess inflation trends, labor market strength, and Trump’s aggressive economic policies.

Fed shifts tone on labor market and inflation

In its post-meeting statement, the central bank removed key language from December’s release that indicated inflation had been making progress toward its 2% target.

Instead, the statement noted that inflation remains somewhat elevated, suggesting that policymakers are not yet convinced price pressures are under control.

Additionally, the Fed expressed optimism about the labor market, stating,

“The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid.”

A strong labor market, combined with persistent inflation, reduces the urgency for further rate cuts.

While markets expect the Fed to ease monetary policy later this year, officials have emphasized the need to evaluate the impact of previous cuts before making further moves.

Trump’s pressure on the Fed

The decision comes as Trump ramps up political and economic interventions, signing a wave of executive orders on trade, immigration, and deregulation.

The president has openly demanded immediate rate cuts, arguing they are necessary to boost economic growth and lower inflation.

Though the White House has no direct authority over the Fed, Trump’s statements suggest a tense relationship with Chair Jerome Powell, similar to his first term.

Markets are closely watching for any signs of political interference in the central bank’s decision-making process.

Stocks dip as rate cut timeline remains uncertain

Following the Fed’s announcement, Wall Street saw a decline, reflecting investor disappointment over the lack of immediate rate relief.

Traders had already priced in a nearly 100% probability of no change in this meeting but expect the first cut by June 2025.

Current market projections indicate a 61% probability of two quarter-point rate cuts by the end of the year, with interest rates expected to fall to around 3.9% by December, according to CME Group data.

The US economy continued to expand at a steady pace in 2024, with consumer spending holding strong.

The Atlanta Fed projects 2.3% annualized GDP growth for Q4 2024, though this was revised downward from 3.2% due to weakening private investment.

Inflation, however, remains a challenge.

The Fed’s preferred gauge—the core personal consumption expenditures (PCE) index—held at 2.8% in November, while headline inflation rose to 2.4%, the highest since July.

The post Federal Reserve takes a pause, keeps interest rates unchanged appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Meta to pay $25 million to Trump to settle lawsuit over ban of social media accounts
next post
Why this Bitcoin proxy is a ‘buy’ even if the Fed holds rates steady today

Related Posts

Joe Biden, you’re no Harry Truman

March 9, 2024

House Republican demands Garland appoint special counsel to...

May 16, 2024

America First Legal sues FEC to force action...

March 3, 2024

Johnson unveils plan to fund Israel, Ukraine in...

April 17, 2024

GOP bill cracks down on ‘loophole’ allowing foreign...

April 19, 2024

US market outlook for 2025: can the bull...

December 14, 2024

Iran not likely to retaliate after alleged Israeli...

April 3, 2024

Possible gunfire breaks out at Trump rally in...

July 15, 2024

House Republicans brace for spring legislative sprint with...

April 30, 2024

Key study in FDA abortion pill case at...

February 8, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved