Economic Update – Follow-Up
The U.S. Federal Reserve has opted to maintain its interest rates during today’s meeting of the Open Market Committee, aligning with prevailing market expectations. This marks the first meeting of the year and a significant event following the transition to President Donald Trump’s administration.
As confirmed in the recent federal announcement, interest rates in the United States will remain within the range of 4.25% to 4.50%. The Fed has provided minimal indication regarding future adjustments to borrowing costs.
Given the central bank’s past actions, it was anticipated that the Fed would hold rates steady after a total reduction of 100 basis points in the previous year.
In a notable shift from its previous statements, the Federal Reserve acknowledged that inflation had shown signs of “progress” toward its 2% target. However, it also cautioned that the rate of price increases remains “elevated.”
This decision may not align with the views of the new U.S. President Donald Trump, who last week at the Davos Forum advocated for lower interest rates. This stance appears to conflict with the Federal Reserve’s approach to independently setting monetary policy.
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