The Federal Reserve has decided to keep interest rates unchanged at 4.25%–4.50%, citing inflation concerns and stable unemployment. During the latest FOMC meeting, Fed Chair Jerome Powell reaffirmed a data-driven approach, signaling that rate cuts are not imminent.
Fed Maintains Caution on Rate Cuts
During his speech, Powell stressed that inflation must improve before any policy changes occur. However, he also clarified that the Fed doesn’t need inflation to hit exactly 2% before considering rate cuts.
“With the economy remaining strong, we don’t have to rush to change policy direction,” Powell stated.
The decision follows three rate cuts in late 2024 and reflects the Fed’s cautious stance amid ongoing economic stability.
Stable Labor Market Supports Fed’s Decision
Powell highlighted the steady unemployment rate, which has remained stable for the past six months. He noted that strong employment figures continue to support the economy, despite persistent inflation concerns.
According to the Fed’s policy statement, hiring remains steady, reinforcing confidence in the labor market.
Trump Criticizes Powell Over Inflation
Following Powell’s speech, Donald Trump criticized the Federal Reserve, blaming its policies for high inflation.
Trump has repeatedly urged the Fed to cut rates, arguing that high borrowing costs hurt businesses and individuals. Powell, however, dismissed political influence, reiterating that the Fed remains focused on economic data.
“We will continue to focus on our work and achieve our goals,” Powell responded.
Fed’s Stance on Crypto and Banking
Powell also addressed cryptocurrency regulation, emphasizing that banks can manage crypto-related risks.
Following the Fed’s decision, Bitcoin initially dropped 1.2%, while the total crypto market cap fell 2.6%. However, Bitcoin quickly rebounded, surging 4.5% to $104,783.
What’s Next for Interest Rates?
With inflation still above 2%, most experts believe the Fed will maintain current rates until at least March. The FOMC will continue monitoring key economic indicators before making further policy decisions.
