BusinessPostCorner.com
No Result
View All Result
Sunday, June 1, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

Federal Reserve holds rates steady as it warns of rising economic risks

May 7, 2025
in Finance
Reading Time: 3 mins read
A A
0
Federal Reserve holds rates steady as it warns of rising economic risks
ShareShareShareShareShare

Stay informed with free updates

Simply sign up to the US interest rates myFT Digest — delivered directly to your inbox.

The Federal Reserve has kept US interest rates on hold for the third meeting in a row, as officials highlighted growing concerns that President Donald Trump’s tariffs will trigger a fresh burst of inflation and weaken the jobs market.

“Uncertainty about the economic outlook has increased further,” the policymaking Federal Open Market Committee said on Wednesday, after voting unanimously to keep the federal funds target at a range of between 4.25 and 4.5 per cent. The committee added that, since they last met in March, “the risks of higher unemployment and higher inflation have risen”.

Fed officials have not cut borrowing costs since December and have signalled that they will remain on pause as they assess the effects of Trump’s tariffs on the world’s biggest economy.

Several top central bankers have signalled in recent weeks that containing persistent price pressures from the levies will be a top priority. This view has been bolstered by recent reports that showed the demand across the world’s largest economy broadly remained robust at the start of the year.

Still, surveys have indicated that businesses and consumers are deeply concerned about Trump’s levies will affect their finances going forward. Corporate earnings also showed many business managers are having difficulty forecasting their sales and profits because of the trade uncertainty.

“The Fed has shifted from engineering a soft landing to keeping the economy from nosediving even as Trump tries to commandeer the steering wheel,” said Eswar Prasad, a professor at Cornell University.

Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, added: “I can’t recall a time when the Fed has upgraded both growth and inflation risks quite so starkly.”

The Fed has maintained its patient approach despite repeated calls from the US president for it to cut borrowing costs. Trump has also launched attacks on chair Jay Powell, labelling him “Mr Too Late”.

The May decision followed the publication of stronger than expected non-farm payrolls figures for April, showing the US labour market remains on a solid footing despite the uncertainty triggered by the Trump administration’s trade policies. 

The jobs figures led many economists to push back their expectations of the first Fed rate cut until September at the earliest.

Recommended

There was no immediate change in rate expectations following Wednesday’s Fed decision.

US Treasury yields, which move inversely to price, fell to their lowest levels of the day. The two-year yield, which moves with interest rate expectations, dipped by 0.03 percentage points to 3.76 per cent, suggesting that the central bank was less hawkish than traders had anticipated. Stocks also dropped to their lowest levels on the day, with the S&P 500 down 0.4 per cent and the Nasdaq Composite 0.9 per cent lower.

Trump announced sweeping tariffs on April 2, which if enacted would raise US trade barriers to their highest levels in more than a century. Most were paused for 90 days a week later.

While GDP contracted for the first time in three years in the first quarter, officials put that down to distortions triggered by the tariffs as US businesses look to get ahead of the levies by importing goods. 

“Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” the FOMC said. 

Credit: Source link

ShareTweetSendPinShare
Previous Post

Weightwatchers files for bankruptcy as Ozempic and Mounjaro surge in popularity

Next Post

Federal Reserve doesn’t budge on interest rates as Trump tariff uncertainty still reigns

Next Post
Federal Reserve doesn’t budge on interest rates as Trump tariff uncertainty still reigns

Federal Reserve doesn’t budge on interest rates as Trump tariff uncertainty still reigns

SOL Strategies Files for B Financing Flexibility to Capitalize on Solana Ecosystem Growth

SOL Strategies Files for $1B Financing Flexibility to Capitalize on Solana Ecosystem Growth

May 27, 2025
U.S. Banking Groups Urge SEC to Scrap Cyber Disclosure Rule, Citing National Security Risks

U.S. Banking Groups Urge SEC to Scrap Cyber Disclosure Rule, Citing National Security Risks

May 26, 2025
NetEase shares near record high as China’s Gen Z embraces games

NetEase shares near record high as China’s Gen Z embraces games

May 30, 2025
Universal school uniform grant to help thousands in Tower Hamlets

Universal school uniform grant to help thousands in Tower Hamlets

May 26, 2025
UK car making plunges to lowest for more than 70 years

UK car making plunges to lowest for more than 70 years

May 29, 2025
Russia’s record air attack on Ukraine dashes hopes for ceasefire

Russia’s record air attack on Ukraine dashes hopes for ceasefire

May 25, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Boeing should not be an ‘unintended consequence’ of trade war

Boeing should not be an ‘unintended consequence’ of trade war

June 1, 2025
How Iran is preparing for Israeli or US strikes

How Iran is preparing for Israeli or US strikes

June 1, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!