The Federal Reserve stayed on hold amid uncertainty over the impact of President Trump’s policies, with chief Jerome Powell saying the central bank is no hurry to cut rates.
The Federal Reserve held interest rates steady and gave little insight into when further reductions in borrowing costs may take place in an economy where inflation remains above target, growth continues, and the unemployment rate is low.
Wall Street lost ground after the Fed announcement but inched higher during Powell’s press conference. In late trade, the S&P was 0.3 per cent lower, the Dow Jones shed 0.2 per cent and the Nasdaq lost 0.6 per cent.“Economic activity has continued to expand at a solid pace.
Last week in Davos, Switzerland, Trump said that he would bring down energy prices, then “demand” that the Fed lower borrowing costs. Asked Wednesday if Trump had communicated his desire for lower rates directly to Powell, the Fed chair said he had “no contact.” The decision to hold the policy rate steady was widely anticipated following three consecutive rate cuts in 2024 that reduced the Fed’s benchmark rate by a full percentage point.
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