The Federal Reserve, which controls money in the US, will probably not change interest rates on Wednesday. They want to learn more about President Trump’s new trade plans before deciding anything. This might upset some people, including the president, who want the rates to change soon.
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New taxes on imported goods are making people worried. They think prices might go up, and jobs could be harder to find. But recent information shows prices are not rising as fast, and the job market is still okay.
Federal Reserve leaders say they are in a good spot to keep jobs strong and prices steady, even with some unknowns. “The economy is doing fine,” said Sarah House, an economist at Wells Fargo. “But there’s a lot of uncertainty, and they’ll act if they need to.”
The decision about rates will come out at 2 p.m. on Wednesday in Washington. Jerome Powell, the Federal Reserve leader, will talk to the press 30 minutes later. People will listen to see if he says they’re “not in a rush” to change rates, like he has before.
Some people think the Federal Reserve might lower rates a little in July and a few more times by the end of the year. Others think they’ll wait until September to make changes.
Statement
The Federal Reserve will likely keep rates between 4.25% and 4.5%. They’ll probably say they’re watching both jobs and prices closely, like they did in March. They might change a few words because the economy slowed a bit earlier this year.
Powell might say they’re focused on keeping prices stable. Some leaders are worried that people expect prices to rise too much. Since the job market is still strong, they don’t feel they need to lower rates soon.
Press Conference
Since the statement won’t change much and there are no new economic plans, people will focus on Powell’s press conference. They want to know when he might lower rates and why.
Diane Swonk, an economist at KPMG, says the Federal Reserve remembers high prices from the past and wants to avoid big problems. Powell might say they don’t want a one-time price jump to cause lasting issues.
The Federal Reserve’s favorite way to measure price increases shows inflation at 2.6% in March, down from 5.6% in 2022. It’s still above their 2% goal.
Political Pressure
Powell will likely get questions about President Trump, who has been criticizing him and even called him names like “total stiff” and “major loser.” Trump used to say he might fire Powell but now says he won’t.
Powell will probably avoid arguing with Trump and focus on how the Federal Reserve makes decisions on its own, without politicians telling them what to do.