Fed still sees two rate cuts, to slow balance sheet reduction.
Rate-setters in the US voted to stand pat on rates, but said that they would slow the pace at which the central bank reduced its balance sheet until a deal was reached on the government debt ceiling.
Source: Sharecast
The target range for the Fed funds rate would therefore remain at 4.25-4.50%.
And while top officials' latest macroeconomic projections were for slower growth and higher growth due to the new administration's tariff policies, Fed chief, Jerome Powell, said his base case was that the resulting upwards pressure on inflation would be "transitory".
Furthermore, and despite the increased economic uncertainty, they continued to expect two more interest rates hikes over the course of 2025.
Powell also said that will the odds of a recession were now greater, they were not high, and described recent data pointing to a jump in inflation expectations as an outlier.
Compare our accounts
If you're looking to grow your money over the longer term (5+ years), we have a range of investment choices to help.
Halifax is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
