Federal Reserve Maintains Interest Rates Amid Economic Uncertainty
The Federal Reserve has decided to keep its benchmark interest rate steady at 4.25% to 4.50%. This decision comes as the economy continues to grow, unemployment stays low, and inflation remains high.
The Federal Open Market Committee (FOMC) also plans to keep reducing its balance sheet. It will continue to let go of Treasury securities and mortgage-backed assets.
According to the Fed, “The economy is still growing well, and the job market is strong. However, inflation is still a bit high.” The committee also pointed out that there’s more uncertainty about the future of the economy. Both higher inflation and unemployment are now seen as bigger risks.
Bitcoin (BTC) prices moved a bit when the news came out. It’s now trading just above $96,000.
The Fed didn’t say if it will raise or lower rates soon. Instead, it said future changes will depend on new data and risks. Fed Chair Powell noted that while inflation is getting better, the impact of tariffs is still unclear. The Fed is ready to act if needed, but the timing is not set.
The fed aims for full employment and 2% inflation in the long run. It will change its policies if new risks threaten these goals.
At its March meeting, the Fed slowed down its balance sheet reduction. Starting in June, it will limit monthly Treasury security redemptions to $5 billion, while keeping the mortgage-backed securities cap at $35 billion.
All committee members agreed with the decision. Neel Kashkari participated as an alternate.
