Overview

• The Federal Reserve maintained its benchmark interest rate at 4.25%-4.5%, citing elevated economic uncertainty.
• Economic growth for 2025 is now forecasted at 1.7%, down from 2.1%, while inflation expectations have risen to 2.7%.
• Fed Chair Jerome Powell acknowledged that tariffs are contributing to inflation and delaying progress toward price stability.
• The central bank plans to slow its balance sheet reduction, allowing only $5 billion of Treasurys to mature monthly.
• Financial markets reacted positively to the Fed's cautious stance, with the S&P 500 rising 1.08% following the announcement.