The Federal Reserve has left interest rates unchanged amid evolving economic dynamics and unstable trade policies.
FED Decision and Context
Today, the FED announced its decision to keep the current interest rates unchanged, a move anticipated by most analysts. This decision comes amid growing concerns about the Trump administration’s trade policies, federal employee layoffs, and broader economic shifts. Jerome Powell will hold a press conference at 21:30 Türkiye time (UTC+3) to discuss this decision further.
Impact on Economy and Workforce
There is an increasing indication in various economic indicators showing a slowdown in consumer spending and job growth. After an initial surge of optimism following Trump's election, economic expansion appears to be moderating. Federal workforce reductions led by Elon Musk’s Department of Government Efficiency (DOGE) have added pressure on local economies and unemployment benefits for laid-off workers. Larry Summers, in an article, described the current situation as a 'stagflationary shock.'
Market Reactions
The economic uncertainty has fueled volatility in financial markets. Last week, the S&P 500 entered correction territory, shedding 10% from its recent peak, marking its first decline in three years. Investors remain uncertain about the long-term impact of Trump’s policies, further complicating the FED decision-making process.
The FED is expected to continue to monitor the economic and market changes closely for potential policy adjustments in the future.
