The Federal Reserve chose to maintain its benchmark interest rate during the latest meeting, signaling a plan to cut rates twice this year, though some policymakers anticipate fewer cuts.
The big picture: Economic projections released by the Fed project slower growth for the economy this year and the next compared to three months ago.
- The unemployment rate is expected to rise to 4.4%, and inflation is predicted to increase slightly to 2.7%, above the central bank’s 2% target.
- Uncertainty surrounding the economic outlook has heightened, according to the Fed’s statement following the two-day meeting.
Zoom in: The projections highlight the complex situation the Fed faces this year, with rising inflation typically prompting rate hikes, while slower growth and increased unemployment often call for rate cuts to stimulate borrowing and spending to boost the economy.
- This decision marks the second consecutive meeting where the Fed has maintained the interest rate at around 4.3%, evidencing a cautious approach as it assesses the impact of Trump administration policies on the economy.
