The Fed will update its rate projections Wednesday.
what to expect:
At its March 2025 meeting, the Federal Reserve is expected to maintain interest rates at the current range of 4.25%-4.5% but may adjust projections about future rate cuts, economic growth, and inflation due to uncertainties from President Trump's tariffs and fiscal policies. Although markets anticipate two or three rate cuts by year-end, economists suggest the Fed might scale back expectations to just one cut or none at all, especially given recent increases in inflation expectations. The Fed will update its forecasts for inflation, potentially raising them above the previous estimate of 2.5%, while possibly lowering its GDP growth outlook. Additionally, discussions may include plans to end the Fed's balance sheet reduction ("quantitative tightening") program this year. Chair Jerome Powell emphasize a patient and cautious stance in his press conference, reinforcing the Fed's intention not to rush policy changes amid ongoing economic uncertainties.
2 comments:
At least there are some things that never change: Powell announcing a patient and cautious stance.
It will be interesting to see if Powell's "cautious" stance actually leads to fewer rate cuts or if he is just continuing to remain cautious. I'm also curious about any changes to their balance sheet reduction plans and what clarity Powell might provide.
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