January 30, 2025
We feel like we don’t need to be in a hurry to make any adjustments.
Federal Reserve Chair Jerome Powell in his post-meeting news conference on Wednesday announcing the decision to keep interest rates steady for the time being.
Why It Matters: The Federal Reserve or “central bank” sets monetary policy with the goal of helping to maintain a stable economy. The Federal Reserve sets the federal funds rate, which determines the rate that banks lend to each other overnight. The Fed cut rates three consecutive times since September 2024, but this week’s decision to keep rates steady came as officials balance a solid economy with the potential for rising inflation.
- Fed Chair Powell said the central bank does not operate “on a pre-set course“ and continues to watch the state of the economy (particularly inflation). The lower inflation becomes, the more likely the Fed is to lower borrowing rates, with the target being an inflation rate of 2%.
- This is the first Fed meeting since President Donald Trump’s return to the White House, and Pres. Trump has said he wants the central bank to cut rates. In the press conference Powell noted, “I’m not going to have any response or comment whatsoever on what the president said. It’s not appropriate for me to do so. The public should be confident that we will continue to do our work as we always have.” (CNBC)
Read More: Fed holds rates steady, takes less confident view on inflation (CNBC)
Federal Reserve issues FOMC statement (The Federal Reserve)
Image Credit: doganmesut / Adobe Stock
by Emily Hooker, based in Texas
