The Federal Reserve held interest rates steady Wednesday, signaling two cuts likely in 2025 but slowing its overall pace of future easing.
The Fed maintained its policy rate at 4.25%-4.50% and projected 0.5% in cuts by year-end. However, it now foresees only one cut in both 2026 and 2027, with inflation lingering at 2.4% through 2026 before easing to 2.1% in 2027.
New forecasts show U.S. GDP growth slowing to 1.4% in 2025, and unemployment rising to 4.5%. Inflation is expected to remain above the 2% target through at least 2026.
Trump again criticized Fed Chair Jerome Powell, calling him “too late” and demanding immediate rate cuts, which the Fed continues to reject. Despite Trump’s pressure, the Fed said “uncertainty remains elevated” and avoided mention of the Israel-Iran conflict or its market implications.
