In a recent meeting, the Federal Reserve (Fed) decided to keep interest rates unchanged at 4.25%-4.50%. This marks the fourth consecutive meeting where rates have remained at the same level.
Rates Left Unchanged
The Fed announced the decision to hold rates steady, which was anticipated by the markets. Expectations for an imminent rate cut are fading amid current economic data.
Changing Rate Expectations
Recent meetings indicated a cautious outlook regarding rate cuts for 2026. While only 4 members opposed rate reductions earlier this year, this number rose to 7 in June. Meanwhile, 10 members predict at least two cuts in 2024.
Trump's Criticism and Influencing Factors
Before the rate decision, Donald Trump reiterated his harsh criticism of Fed Chairman Jerome Powell, calling him "a very stupid person." He expressed his desire for a rate cut of 100 to 250 basis points. Additionally, Trump's tariffs have raised the average tariff in the US to levels not seen since the 1930s, impacting Fed decisions.
The Fed's recent decision and forecasts indicate a cautious approach, with no immediate rate cuts planned. Given mixed economic signals, the Fed is likely to maintain this cautious policy until fall.
