Jerome Powell announces Fed's interest rates on hold amid uncertainty
- Federal Reserve Chair Jerome Powell indicated the central bank may keep interest rates unchanged as economic uncertainty remains due to Trump's policies.
- Concerns include potential impacts of tariffs and changes in consumer spending behavior on inflation and economic growth.
- The Fed will wait for more clarity on these issues before adjusting its policies, reflecting a cautious approach.
In New York, Federal Reserve Chair Jerome Powell addressed concerns regarding the economic outlook, emphasizing that the central bank would likely maintain its existing key interest rate. He highlighted the prevailing uncertainties from the Trump administration's policies, which have invoked changes across various sectors including trade, taxes, and regulation. Powell reiterated that the net effect of these shifts is crucial in determining the Fed's rate policies. His remarks reflect a waiting strategy as new economic data emerges, also noting that inflation expectations are particularly important given potential impacts from tariffs. Economists, including those from Goldman Sachs and Morgan Stanley, expect inflation to rise in 2025 due to these tariff policies. Powell's comments have led to adjustments in traders' forecasts regarding potential rate cuts this year, with more traders now anticipating three rate reductions compared to one previously expected. Consumer spending trends were also discussed, noting a slowdown compared to previous periods. Powell's remarks come at a time when overall economy remains mostly stable, despite the increasing economic uncertainty.