MARCH 24, 2025 – FED MEETS, RATES REMAIN UNCHANGED
The Federal Reserve met last week and kept interest rates at 4.25 to 4.5 percent, reaffirming plans for two rate cuts in 2025, targeting a rate of 3.75 to 4 percent by year-end. GDP growth projections for 2025 were lowered to 1.7 percent (from 2.1 percent in December), with 2025 core inflation expected at 2.8 percent with a slowdown in the labor market.
Economic uncertainty has increased due to tariffs and policy shifts on immigration, spending, and taxes. Fed Chair Jerome Powell is waiting for more clarity before adjusting policy. Concerns about stagflation could complicate future rate cuts to fend off an economic slowdown.
The Fed will also slow its balance sheet reduction, allowing $5 billion in securities to mature monthly starting in April, down from $25 billion. The Fed will meet again May 6-7.