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Federal Reserve Expected to Hold Rates Steady as Economic Projections Awaited

Chair Jerome Powell likely to adopt a cautious tone as the Fed balances inflation risks from tariffs with market expectations for rate cuts.

An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo
The U.S. Federal Reserve Building in Washington, D.C.. For RPA. WM/HB
Spencer Platt/Getty Images
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Overview

  • The Federal Reserve is widely expected to keep interest rates unchanged at its March meeting, maintaining its 'not-in-a-hurry' stance on rate cuts.
  • Updated economic projections will be released, including forecasts for growth, inflation, employment, and interest rates, which may highlight inflationary pressures from new trade tariffs.
  • Analysts predict inflation forecasts could rise, with core PCE inflation potentially reaching 2.8% in 2025, while growth projections may be revised downward.
  • Market expectations for rate cuts later in the year diverge from the Fed's December 2024 projections, which indicated only two 25-basis-point cuts in 2025.
  • Chair Jerome Powell is expected to communicate cautiously to avoid market turbulence and political friction, emphasizing the Fed's dual mandate of stable inflation and employment.