Overview

• Fed Chair Jerome Powell indicated the central bank is likely to hold interest rates steady in the near term, citing significant economic uncertainty caused by recent policy changes under President Trump.
• Key factors contributing to uncertainty include new tariffs, trade policies, immigration rules, and federal spending adjustments, which have led to concerns about inflation and slowed consumer spending.
• The Federal Reserve’s Beige Book highlighted increased mentions of uncertainty, while February's jobs report showed moderate job growth but a slight uptick in unemployment to 4.1%.
• Market expectations for rate cuts have grown, with traders now predicting three reductions this year, but Fed officials stress the need for patience until clearer economic trends emerge.
• Atlanta Fed President Raphael Bostic suggested the Fed might not have sufficient clarity to adjust rates until late spring or summer, emphasizing the complex interplay of economic shifts.