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According to analysts, US Fed officials face the difficult task of figuring out how the economy will ultimately respond to Trump’s tariffs.
US Fed Meeting Today.
The US Federal Reserve is set to announce its interest rate decision at 11:30 pm on Wednesday. The US FOMC meeting comes at a time when there is a global economic uncertainties amid trade war. According to analysts, US Fed officials face the difficult task of figuring out how the economy will ultimately respond to Trump’s tariffs.
Analysts have already pointed to higher inflation and weaker growth this year, a toxic duo resembling “stagflation”.
Central bankers are almost certain to hold interest rates steady at the conclusion of their March meeting on Wednesday, and Fed Chair Jerome Powell will likely reiterate that the economy remains in decent shape, but their latest projections will probably show the economy is trending toward stagflation, economists say.
The Fed is widely expected to keep interest rates steady at 4.25%-4.50%, following three consecutive rate cuts in 2024, according to analysts.
Since Trump took office in January, his administration has overhauled trade policy, slashed the federal workforce, clamped down on immigration and reconfigured America’s relationship with its allies — structural changes that have put American consumers, businesses and investors on edge. During that time, major stock indexes went from hitting record highs to slipping into correction territory and consumer sentiment went from an eight-month high to its lowest level since November 2022.
In the previous monetary policy review in January 2025, the US Federal Reserve had kept its key interest rates unchanged at 4.25-4.50 per cent.
Before that, on December 18, 2024, the US Fed had announced a cut in the key interest rates by 25 basis points to 4.25-4.50 per cent. It was the third rate cut by FOMC in three months, with the first rate cut announced in September (by 50 basis points) and second in November (by 25 bps). The first cut in the current rate cut cycle came in September after 2024 a gap of four years.
(With Inputs from Agencies)