- Title: Fed in no hurry to move on rates amid high uncertainty on tariffs
- Date: 19th March 2025
- Summary: WASHINGTON, D.C., UNITED STATES (MARCH 19, 2025) (UNRESTRICTED POOL) U.S. FEDERAL RESERVE CHAIR, JEROME POWELL, APPROACHING LECTERN (SOUNDBITE) (English) U.S. FEDERAL RESERVE CHAIR, JEROME POWELL, SAYING: POWELL: "Forecasting is always very, very hard. And in the current situation, I just think uncertainty is remarkably high." JOURNALIST: "And sorry, standing here today, w
- Embargoed:
- Keywords: Fed Jerome Powell
- Location: WASHINGTON, D.C., UNITED STATES
- City: WASHINGTON, D.C., UNITED STATES
- Country: US
- Topics: Budget/Taxation/Revenue,North America,Government/Politics
- Reuters ID: LVA001019219032025RP1
- Aspect Ratio: 16:9
- Story Text: The Federal Reserve held interest rates steady on Wednesday (March 19), as expected, and while U.S. central bank policymakers indicated they still expect to reduce borrowing costs by half a percentage point by the end of this year, Fed Chair Jerome Powell made it clear that the Fed would wait for more clarity on Trump administration policy before adjusting rates.
"We're not going to be in any hurry to move," PowelI said in a press conference, noting that uncertainty is "unusually elevated" and that policymakers see both weaker economic growth and higher inflation boosted at least in part by the Trump administration's tariffs, developments which on their own would each require an opposite policy response.
"Our current policy stance is well positioned to deal with the risks and uncertainties we face," he said, noting that the economy is strong and the labor market is balanced, with hiring and firing overall at equally low levels. "The right thing to do is to wait here for great for greater clarity about what the economy is doing."
Taking stock of the Trump administration's rollout of tariffs, Fed officials actually marked up their outlook for inflation this year, with their preferred measure of price increases expected to end the year at 2.7% versus the 2.5% pace anticipated in December.
"There may be a delay in further progress (toward the Fed's 2% inflation goal) over the course of this year," Powell said.
Officials also marked down the outlook for economic growth for this year from 2.1% to 1.7%, with slightly higher unemployment by the end of this year.
Nearly all Fed policymakers felt the risk of higher inflation and of lower growth had increased, with a near unanimous sentiment in saying the outlook for the year was muddled.
The forecasts are the Fed's first group attempt to account for the first weeks of the new Trump administration and the initial rollout of what White House officials say will ultimately be global tariffs on imported goods. The Fed left its policy rate in the 4.25%-4.50% range.
U.S. stocks extended their gains slightly after the release of the Fed's policy statement and projections, with the Dow Jones industrial average up 0.5% and the tech-heavy Nasdaq Composite up 0.7%.
U.S. interest rate futures priced in a cut of just over half a percentage point this year, with traders seeing a 62.1% chance of the Fed resuming rate cuts at its meeting in June, according to LSEG estimates, compared with a 57% chance before the announcement.
The dollar pared some of its earlier gains, with an index of major currencies up 0.5%. U.S. Treasury yields also eased slightly, with the benchmark 10-year note yield up 1.7 basis points on the day to 4.298%.
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