Overview

• The Federal Reserve kept its benchmark interest rate unchanged at 4.25%-4.5%, citing economic uncertainty and inflationary pressures.
• The Fed revised its 2025 economic growth forecast downward to 1.7% from 2.1% in December, while raising its inflation projection to 2.7%.
• Chair Jerome Powell acknowledged tariffs as a key driver of inflation but described their impact as likely temporary, adding that uncertainty remains high.
• The central bank reaffirmed its guidance for two interest rate cuts in 2025, which helped stabilize financial markets and boost major stock indexes.
• To support market stability, the Fed announced a slowdown in its balance sheet reduction, known as quantitative tightening.