The Federal Reserve building in Washington (Photo: FreePik, Eyeem)
Washington-The US Federal Reserve still looks like a resting pole in an increasingly insecure political environment. Trump’s tariffs stir up. Today the Federal Reserve publishes its interest rate decision – the focus is above all the accompanying comments and forecasts.
Because markets and economists agree: the Fed decision-makers will not change the key interest rate today-the span would remain with it at 4.25 to 4.50 percent. This interest rate has been in effect since December after the Fed had reduced the rate 3 times in a total of 100 basis in the 2nd half 2024.
In view of the falling inflation, the US Federal Reserve had started the turning point. However, inflation in the USA (Consumer Price Index) has risen again since September-4 times in a row from 2.4 to 3 percent. First The February report brought some relaxation again with 2.8 percent.
Core inflation continues to be high – growth prospects deteriorated
The important core inflation without food and energy is extremely tough, which in January 2025 was 3.3 percent at the same level as in June 2024. The core rate also gave up somewhat in February, now 3.1 percent. Price drivers are in particular services (4.1 percent).
On the other hand, the US economy motive stutters: Analysts have lowered the growth forecastsThe US labor market with job growth and unemployment rate loses swing. Remey worries spread. The focus: President Trump’s leaking customs policy.
Share crash and consumer mood-analyst: negative feedback
The US stock markets shaken the uncertainty, the much-noticed Index S&P 500 has lost 8.43 percent since February 18-2 days before Donald Trump’s office (as of March 18, 5 p.m.). Inflation also have that Let consumer confidence break away.
“There is an increasing risk that offer shocks will trigger permanent negative feedback loop through tariffs, slowed down immigration trends and personnel cuts in the public service”, ” comments on Satyam Panday, for example by S&P Global Ratings.
President Powell has no hurry – forecast of the Fedwatch Tools
“We don’t really have to do anything.” Fed President Jerome Powell braked At the beginning of March. But how long? With the interest decision today, the Fed also renews its interest forecast. The appointment markets expect 60 percent With interest reductions by 0.75 percent by the end of 2025.
And when does the next downward step come? Loud Fedwatch tool The majority of the appointment dealers on June 18 – with a probability of 64.3 percent. The chance of reducing interest rates at the meeting on May 7 is therefore 20.8 percent. (As of March 18, 5 p.m. CET)