The Federal Reserve’s decision to keep its policy rate steady was the most significant economic development of the past week.

Their announcement suggested that the economy might face some challenges ahead due to rising inflation, weaker growth, and an increased risk of recession, with some signs of stagnation.

During his press conference, Fed Chairman Powell described the economy as “strong,” but he also emphasised that the outlook remains “highly uncertain” due to the new administration and recent policy changes.

He pointed out that tariffs and trade barriers are driving these concerns.

Inflation estimates have gone up slightly to 2.2%, growth forecasts have dropped to 1.7%, and unemployment predictions have risen to 4.4%.

Powell acknowledged that inflation continues to be relatively elevated. Regarding interest rates, he mentioned that the Fed is not in a hurry and is willing to wait for more clarity.

Despite revisions, the Fed’s dot plot still indicates two potential rate cuts this year. Notably, the committee’s........

© Business Recorder