Fed Holds Interest Rates Steady as ECB Prepares Further Cuts
The Federal Reserve opts for caution under Trump's renewed pressure, while the ECB is expected to announce its fifth rate cut since mid-2024 to support Europe's struggling economy.
- The Federal Reserve kept its benchmark interest rate unchanged at 4.25–4.5% during its first meeting since Donald Trump's return to the presidency.
- Fed Chair Jerome Powell cited persistent inflation, which rose to 2.9% in December, and a strong labor market as reasons to maintain the current rate policy.
- Trump has publicly criticized the Fed's decision, demanding immediate rate cuts and claiming to understand monetary policy better than Powell.
- The European Central Bank is widely expected to announce a 0.25% rate cut on Thursday, reducing its deposit rate to 2.75% to stimulate the Eurozone's weak economy.
- Rising inflation in both the U.S. and Eurozone, along with geopolitical uncertainties like Trump's tariff threats, complicates monetary policy decisions for both central banks.
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