WASHINGTON – The Federal Reserve on Wednesday remained constant interest rates amid high inflation and low economic growth expectations, and still indicates two discounts later this year.
With the markets not to expect any chance of the central bank’s step this week, the Federal Open Market Committee has kept the target borrowing rate in a range ranging between 4.25 % -4.5 %, as it has been since December.
In addition to the average decision, the committee indicated, through the “DOT plot”, which was closely seen, that two pieces by the end of 2025 are still on the table. However, it was launched from one reduction for each of 2026 and 2027, which put the discounts in the expected future prices at four, or a full percentage.
The conspiracy indicated that the federal reserve officials are continuing about the future of prices. Each point is one official expectation. There was a widespread scattering of the matrix, noting the average FBI’s funds about 3.4 % in 2027.
Seven of the 19 participants indicated that they did not want any discounts this year, up from four in March. However, the committee agreed to a unanimous policy statement.
Economic projections from the participants meeting indicated more pressure in the recession, as the participants believe that the gross domestic product is advancing at a rate of 1.4 % in 2025 and 3 % inflation.
GDP expectations decrease
The revised expectations of the last update in March represented a 0.3 percentage points for GDP and the same amount of the Personal Consumption Expenditure Expenses Index. Core PCE, which eliminates food and energy prices, is expected by 3.1 %, and also 0.3 higher degrees. Unemployment expectations have seen a small review, up to 4.5 %, or 0.1 percent above March and 0.3 Celsius higher than the current level.
FOMC statement has not changed a little about the May meeting. The committee said that the economy grew at the pace of “solid” with “low unemployment” and “somewhat high” inflation.
Moreover, the committee indicated less concern about economics and clouds on the White House trade policy.
“The uncertainty about economic expectations has shrunk, but it is still high. The committee is concerned with the dangers that both sides are exposed to its double mandate,” the committee said.
during press conferenceChairman of the Federal Board Jerome Powell I suggest that there be time to wait for more clarity.
“At the present time, we are in a good position to wait to learn more about the potential path of the economy before considering any amendments to our policies,” said Powell.
American stocks They were hesitating near the Flatline line in the wake of the announcement.
Trump pays price discounts
while Federal Reserve Statement The reason for the deviation of uncertainty was not explained Donald Trump Reduce some of his fiery commercial speech and the White House in the midst of a 90 -day negotiation period on customs duties.
Trump’s rhetoric towards the federal reserve, however, did not relieve.
Earlier on Wednesday, President Powell again criticized his colleagues for not mitigating. Trump said that the FBI’s funds should be less than 2 percentage points Powell mocked it as a “stupid” To not pay the committee to reduce.
Federal reserve officials were hesitant to moveFor fear that Trump’s tariff this year can cause Inflation in the coming months. Prices have not yet indicated that duties have a significant impact. Delay in feeding the definitions, in addition to softening the demand for consumers and the accumulation of stocks before the announcement of “Tahrir Day” on April 2 It helped transform its effect.
Powell said: “Whoever knows that he expects a meaningful increase in inflation in the coming months of customs tariffs because someone must pay the definition fees.”
the The conflict between Israel and Iran Another wild card adds to the policy mix, with Possibilities for high energy prices An additional additional factor in maintaining the federal reserve from the pieces. The statement did not mention the impact of fighting in the Middle East.
The contradictory economy can gradually provide an incentive to reduce it later this year.
Modern labor market data shows that workers’ hairstyles are crawling, and long -term unemployment also rises and spends less consumers. Retail sales decreased about 1 % in May The modern data has reflected the housing market, the cooling, with the start of reaching its lowest level in five years.
“They are sitting at their hands, pending knowing if the definitions increase inflation or the job market begins to stumble, and whatever it is part of their double mandate will affect first, it will likely direct any direction they take, although the bias still tend to reduce prices (or at least maintain rates without change; not to raise Prices).
Zaccarelli was not surprised that the prices are fixed. However, he said that the market was surprised by the comment that the uncertainty may “diminish.”
For Trump, the importance of low prices stems from the high cost that the government pays to finance its debt of $ 36 trillion.
The benefit of debt on the right track to reach a total of $ 1.2 trillion this year and exceed all other budget elements except for social security and medical care. The last reduction in the Federal Reserve in December, and treasury revenues rose throughout the year, which prompted additional pressure on budget deficit It is likely that you approach $ 2 trillion, or more than 6 % of GDP.
Correction: Participants in the meeting expect that GDP will advance at a rate of 1.4 % in 2025. A previous version of the story has erred in the year.
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2025-06-18 19:30:00
