US Fed meeting: The process of rate cuts in the US has stopped for the time being. In the Federal Reserve meeting held on Wednesday, January 29, it has been decided not to make any change in the rates. This decision has been as per the market estimates. After the decision of the central bank, the rates will remain in the range of 4.25 percent to 4.5 percent.
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US market
Earlier, rates were cut in 3 consecutive meetings. After the announcement, the US market has seen a decline and the Nasdaq fell by more than half a percent and the S&P 500 by about half a percent. Dow Jones also registered a decline. This meeting of the Federal Reserve is the first meeting of the year 2025 and the first meeting after the new US President Trump took office. After the announcement on rates, Fed chief Jerome Powell said that the economy remains strong. Regarding future policy, he said that the committee will keep an eye on the upcoming data of the economy including inflation and at present the committee is not working on any predetermined thinking. What is the market forecast
Market Forecast
The market had already anticipated that the rates would remain stable. Reuters report has quoted experts estimating that the Federal Reserve is waiting for a clear picture of the new president’s policies. According to the report, the Federal Reserve will wait for more data and see what will be the impact of Trump’s policies and the direction of the economy. Only after this can a decision be taken regarding rates. It has not been even 10 days since Trump took power. A large section of the market believes that the Federal Reserve will once again start cutting rates at the end of this year. However, at present the process of keeping rates stable has started which can continue till June.
Rate cuts in last 3 policies
Earlier, the Federal Reserve has cut rates continuously in the last 3 meetings and during this time the rates have come down by one percent. Earlier in December, the Fed had cut by a quarter percent and it was estimated that another half percent could be cut in the year 2025. Which is possible in 2 times.
Amid concerns about the impact of Trump’s tariff measures on inflation, the market believes that the current interest rate cuts are enough for the Federal Reserve at the moment and will now wait for the impact of tariff policies and economic data.