Washington – The Federal Reserve left its benchmark interest rate unchanged on Wednesday after cutting three times in a line last year, indicating a more alert approach, as Fed attempted to gauge that inflation has led to a gauge and Can policies chase President Donald Trump.
In a statement, Fed said that the job market is “solid”, and that unemployment rate “has stabilized at low levels in recent months.” Fed also strictly strictly strictly said that it “is somewhat high.” Both a healthy job market and more stubborn inflation usually cut a lower fed rate in the coming months.
At a news conference on Wednesday, Fed Chair Jerome Powell dismissed a large number of questions about President Trump’s recent comments, including one from last week, when Trump said that he would reduce oil prices. And then “demand” will be done at low rates. He also said that he would talk about it with Powell.
Powell said, “I am not going to react or comment on whatever the President said.” Asked if Trump had communicated Powell to Powell directly for low rates, the Fed Chair said he had “no contact.”
Regarding the major rate of Fed, Powell expressed a more intentional approach, given that the economy is mostly healthy – the unemployment rate is low 4.1% and the decline has increased by 3% at an annual rate.
“With … the economy remains strong, we do not need to stay in a hurry to adjust our policy stance,” Powell said.
When asked about the potential impact of the rapid policy changes proposed on tariffs, immigration, tax deduction and deragulation, Powell said that Fed Policy maker “Fed policy maker” Are.”
“We don’t know what will happen,” he said. “We need to express those policies, before we can start making a commendable assessment of what their implications for the economy will be.”
Kathy Bosjanik, the chief economist of Nationwide Financial, said Powell’s comments show that Fed would not cut rates again by the middle of this year.
“We are all waiting and look at the mode including Fed,” he said.
The Fed reduced its rate last year to 5.3% to 4.3%, with concern that the job market was getting weaker. The hiring slowed down in summer and the unemployment rate was fixed, allowing the Fed authorities to approve the cut in an outer half point in September. Nevertheless, the hiring rebound and unemployment rate declined slightly last month, less 4.1%.
Powell has said that it is difficult to gauge where inflation is led, due to uncertainty in the part of what policies Trump will adopt and how soon they will affect the economy. High tariffs and tax cuts may push inflation more, while the deragulation may possibly reduce it.
The fed usually keeps the interest rates high to borrow and spend and calm inflation.
In December, the Fed officials indicated that they could reduce their rates only twice this year. Goldman Sachs Economists believe that they will not be cut till June and December.
According to Fed’s favorite remedy, in November, inflation was only 2.4%, not away from its 2% target. But except for unstable food and energy categories, core prices increased by 2.8% more painful a year ago. Fed pays full attention to the main prices because they are often a better guide to the future path of inflation.
Powell stated that Fed “inflation on inflation or … before considering some weakness in the labor market, we make further cuts before considering.
During the news conference, Powell was also asked about Trump’s executive orders, which were to limit diversity, equity and inclusion programs, which Powell was previously supported by Powell.
“As we have practiced on many administrations, we are working to align our policies with proper and applied laws with executive orders,” he said.
Powell also addressed Fed’s decision earlier this month, which was to leave the network to greene the financial system, an international group demanding to explain how financial regulators and banks addressed how to address climate change Can do The Fed joined the group in 2020.
Powell said that the goals of the group had expanded to things such as addressing biodiversity that were “beyond the way” from the mission of the Fed.
“I think NGF activities are not a good fit for the fed, looking at our current mandate,” he said.
Most other central banks in developed countries are cutting their interest rates. For example, the European Central Bank is widely expected to reduce the cost of borrowing in its next meeting on Thursday. Bank of Canada said on Wednesday that it also cut its rate, and Bank of England also expected to do so next month.
Bank of Japan, however, is actually increasing its rate from a rock-boatum level. Japan has finally experienced some inflation after decades of slow growth and deflation matches.
A Fed rate cut in March is still possible, although futures pricing of financial markets is likely to be less than 20%.
As a result, American homes and businesses are unlikely to see a lot of relief from high lending costs soon. The average rate on a 30 -year mortgage was reduced by 7% last week after the average rate increased for five direct weeks. The cost of borrowing money remains in the high economy even after Fedes reduced their benchmark rate.
This is because investors expect healthy economic growth and stubborn inflation will cut future rates. They recently bid the 10 -year Treasury above 4.80%, its highest level since 2023.
Powell admitted that high rates have made house-to-house difficult for many people to spend household expenses, and will probably continue.
There were reactions to Fed’s decision in stock and bond markets, which were widely expected.