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The Federal Reserve kept its key interest rates in the check on Wednesday and reversed the recent relaxation policy trend because it studied the bumpy political and economic pattern.
In a widely expected move, the Federal Public Marketing Committee of the Central Bank remained between 4.25 % -4.5 %.
After three consecutive victories since September 2024, this decision deserves a complete percentage point, and marks the first Fed of the Federal Reserve Conference since the Federal Reserve critics. Donald Trump As a president last week, he almost immediately made his intention to know He hopes that the central bank will reduce interest ratesEssence
this Declaration after the meeting There are some clues on the reasoning behind the decision to decide the stability of interest rates. It provides more optimistic views in the labor market, and at the same time, it has deleted a key reference for the Fed’s 2 % inflation target from the December statement.
The new language wrote: “In recent months, the unemployment rate is stable at a lower level, and the labor market is still stable.” “Inflation still improves a bit.”
Investors will be key in comments of Chairman Jerome Powell’s comments Press conference at 2:30 pm Eastern American time For more fine differences.
The stronger labor market and stubborn inflation will provide less motivation for the Federal Reserve’s relief policy. The statement once again shows that the economy “continues to expand at a solid speed.”
The latest statement of policy makers shows that people are worried about whether the progress of inflation is lowered. Officials also said that they wanted to see how the previous cuts worked hard in the economy, although most people expect the tax rate this year.
In addition, this decision is a political background against fluctuations.
In more than a week, Trump signed hundreds of administrative orders trying to execute active agenda, cutting the policy and political norms of Washington. The president has put tariffs as a tool for economic and foreign policy, but also ordered a wave of deportation to those who illegally cross the border, and proposed a series of giving up control measures.
In addition, Trump talked about his confidence last week, that is, he will reduce inflation and say that “requires” to reduce interest rates “immediately”. Although the president does not have any power except for the members of the board of directors, Trump’s statement shows that the relationship with the policy maker may be controversial, just like the finals.
Compared with the 40 -year peak reached in the middle of 2022, the inflation rate has declined sharply, but the Fed’s 2 % goal is still elusive. In fact, Central Bank Preferred price list Display the title inflation rate rose to 2.4 % in November, the highest since July, and core measures do not include 2.8 % food and energy.
Trader used to The probability of nearly 100 % pricing The Federal Reserve, which holds the line at this meeting, did not see another cut until June. According to the market pricing at the end of 2025, about 3.9 % CME group dataEssence stock Fall after decisionEssence
According to data from Atlanta Fed, in 2024, economic growth has been stable, and consumer expenditure continues to be good during 2024. The annual growth rate of GDP in the fourth quarter was 2.3 %. With the weakening of private investment data.
The meeting also carried out changing voting works on FOMC. Powell This year, the other seven members of the board of directors joined the Chicago President Oscar Gulsby, the Alberto Musrem in San Louis, the Susan Collins in Boston, and Jeffrey Schmid in the city of Kansas. Keeping the capital interest rate unchanged is consistent.