Markets expect the U.S. Federal Reserve to announce today that it will keep its key interest rate at its current level of 3.6%, ignoring repeated calls for rate cuts from President Donald Trump, who has cut interest rates by a quarter of a percentage point three times in a row over the past year.
However, the unemployment rate is stable and there are signs that the economy may recover. At the same time, inflation remains well above the Federal Reserve’s 2% target.
monetary policy
One of the main issues that Fed Chairman Jerome Powell is likely to address in today’s press conference is how long the Fed will maintain its current monetary policy.
The rate-setting committee remains divided between officials who oppose further rate cuts until inflation falls and those who want rates lower to further support employment.
Most economists expect the board to cut rates twice this year, most likely after its next June meeting.
support the economy
This week’s Federal Reserve meeting is under unprecedented pressure from the Trump administration.
The interest rate cuts approved by the central bank last year were aimed at supporting the economy and preventing a sharp deterioration in the labor market after employment slowed significantly following blanket tariffs imposed by President Donald Trump on nearly all U.S. imports last April.
