The Federal Reserve on Wednesday, March 19, decided to leave interest rates unchanged, although at the same time underlined that the cost of borrowing is likely to be lowered later in the current year.
It is worth noting that the central bank of the United States made the mentioned decision amid increasing concerns about the impact of the current configuration of Washington’s trade policy, which provides for a growth in tariffs on imported goods, on the situation in the US economic system, which is showing a slowdown.
The Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%. In the context of the dynamic of the mentioned indicator, no changes have been recorded since December.
It is worth noting that the decision made on Wednesday coincided with the preliminary expectations. Markets estimated that there was almost zero chance that the Fed would change the cost of borrowing this week as part of its next monetary policy meeting.
Officials at the central bank of the United States have said they expect interest rates to be cut by another half a percent in the current year. The corresponding statement was made against the background of the mentioned uncertainty related to the tariff policy of the administration of US President Donald Trump, and an ambitious fiscal policy of tax breaks and deregulation.
Fed Chairman Jerome Powell said that the financial regulator would be comfortable keeping interest rates elevated if conditions warranted it. According to him, the United States central bank can maintain policy restraint for longer if the economy remains strong, and inflation does not continue to move sustainably toward the 2% target.
As we have reported earlier, US Budget Deficit Increases.
