Coming out of their March FOMC meeting, Federal Reserve officials decided to hold interest rates in the range 4.25% to 4.5%.
Yahoo Finance senior Fed reporter Jennifer Schonberger reports on the breaking Fed decision as the US central bank maintains its forecasts for two rate cuts in 2025.
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defense decision out. Yahoo Finance's Jennifer Schonberger has the details.
No change. The Federal Reserve holding rates steady in the range of 4 and a quarter to 4 and a half percent, but retaining their outlook for just two interest rate cuts this year. The Fed announced they will begin slowing the runoff of their balance sheet beginning next month in April. They will allow treasuries to roll off at a rate of $5 billion per month down from $25 billion, though they will allow mortgage back securities to continue rolling off at the pace of $35 billion per month. The Fed didn't increase their outlook for inflation and lowered their outlook for growth. They now see inflation as measured by core PCE rising 2.8% this year. That's up from two and a half percent previously. Meanwhile, they lowered their outlook for GDP to 1.7% this year. That is down from 2.1 forecast before. The unemployment rate seen edging up to 4.4 from 4.3 previously. While the median projection is for two rate cuts this year, a large chunk of the committee has become more hawkish. Four officials saw cutting rates by just one rate cut this year, while four other members saw no rate cuts this year. So we're looking at eight members of this committee that have become more hawkish, so kind of a close call there on just the two cuts this year. Now, policymakers said in their statement that uncertainty around the economic outlook has increased, though they retained their characterization of the economy, saying that economic activity has continued to expand at a solid pace. This decision was not unanimous. Fed governor Chris Waller dissented, saying that he agreed with the notion of holding rates steady, but wanted to continue the balance sheet runoff at the current pace.
