Key Announcements from FOMC

The Federal Open Market Committee (FOMC) kept the federal funds rate steady at 4.25%-4.5%, continuing the current rate since December 2024.  Source: Federal Reserve Bank of New York. Target rate as of 19 March 19 2025. The committee also revised its economic projections, downgrading its GDP growth forecast for 2025 to 1.7% (down from the previous estimate of 2.1% in December 2024). Citing tariffs and economic uncertainty, it also raised its inflation expectation. Core inflation is expected to grow at 2.8% annually, up from the previous 2.5%.  Lastly, the Fed announced a reduction in its “quantitative tightening” programme, scaling back the runoff of Treasury holdings to US$5 billion a month, down from US$25 billion.

What This Means

The FOMC’s decision to maintain interest rates despite the evolving economic outlook reflects a cautious stance. While the central bank acknowledges a potential slowdown in the economy,...