Fed expected to keep interest rates unchanged, giving time to assess impact of Trump policies
the Federal Reserve is expected to maintain interest rates this week, giving themselves more time to reduce inflation and evaluate the impact of President Trump's policies on the economy. The Federal Reserve has cut interest rates three times since September, with a cumulative decrease of 1 percentage point. Currently, the Federal Reserve's benchmark interest rate range is 4.25% to 4.5%. Several decision-makers have indicated that they expect the number of interest rate cuts this year to decrease, as data shows that the US economy is performing well and inflation is more stubborn than expected. The inflation indicator favored by the Federal Reserve, the Personal Consumption Expenditures Price Index for December, is scheduled to be released on Friday.
Gregory Daco, Chief Economist at EY, said that the Federal Reserve will "pause the rate cut this week. They hope to preserve as much choice as possible so that they can further adjust the federal funds rate later this year."
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