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Federal Reserve Chair Jerome Powell indicated that the central bank is not in a hurry to adjust interest rates, emphasizing a cautious approach amid economic uncertainties. The Federal Open Market Committee (FOMC) recently decided to maintain the federal funds rate at its current range of 4.25% to 4.50%.
Powell highlighted that recent policy changes, including tariffs imposed by the Trump administration, have contributed to increased uncertainty in the economic outlook. These measures have led to slower economic growth and temporarily higher inflation. The Fed’s projections now anticipate economic growth of 1.7% this year, a downward revision from previous estimates, with inflation expected to be around 2.7%.
Despite these challenges, the labor market remains stable, with unemployment rates holding steady. However, Powell noted that the Fed is closely monitoring incoming data to assess the evolving economic landscape before making any further monetary policy adjustments.
This measured stance allows the Federal Reserve to evaluate the impacts of current policies and global economic conditions, ensuring that any future rate decisions align with its dual mandate of promoting maximum employment and maintaining price stability.
