Federal Reserve Maintains Interest Rates Amid Economic Uncertainty
The Federal Reserve has decided to keep its benchmark interest rate steady at 4.25% to 4.50%. The central bank cites ongoing economic growth, low jobless rates, and persistent inflation as reasons for this decision.
The federal Open Market Committee also plans to continue reducing its balance sheet. This involves gradually selling off Treasury securities and mortgage-backed assets.
According to the Fed’s statement,”The economy is expanding at a solid pace,with a robust labour market. Though, inflation remains somewhat high.” The committee also noted growing uncertainty in the economic outlook, with risks of both higher inflation and unemployment increasing.
Bitcoin (BTC) experienced some volatility during the announcement and is now trading slightly above $96,000.
While the Fed did not hint at an immediate rate change,it stressed that future decisions will depend on new data and emerging risks. Fed Chair Powell mentioned that even though the inflation outlook is improving,the impact of tariffs is still unclear. The Fed is prepared to act quickly if necessary,but the timing is uncertain.
The central bank remains committed to its long-term goals of maximum employment and 2% inflation. It will adjust policies if new risks threaten these objectives.
At its March meeting,the Fed announced it would slow down its balance sheet reduction. Starting in June, it will cap monthly Treasury security redemptions at $5 billion, while keeping the mortgage-backed securities cap at $35 billion.
All committee members agreed with the decision, with Neel Kashkari participating as an alternate.
