The Federal Reserve signaled a more cautious approach to interest rates, leading to one of its worst stock market days in years. With traders expecting no cuts and an increase in inflation, investors remain uncertain about the Fed’s next moves. The central bank is expected to keep rates unchanged this Wednesday and deliver just two rate reductions in 2025. Amid a strong economy and a new administration, confidence in the Fed’s easing stance is waning due to persistent concerns about inflation.
While the U.S. economy shows resilience, inflation remains elevated, drawing criticism from former President Trump. The Republican leader has threatened to push for lower rates, though he recently indicated willingness to listen to the Fed. With December’s 25-basis-point cut marking the third since September, and current rates ranging between 4.25% to 4.5%, the Fed appears hesitant yet unsure about its next step.
As the year unfolds, markets await whether the Fed will adjust its policy again or continue holding off on further easing.
Source: https://fortune.com/2025/01/28/fed-meeting-interest-rates-jerome-powell-donald-trump-inflation-stocks