The US regulator extended the pause in the rate cut cycle. Uncertainty related to Trump’s policy contributes to the growth of inflation expectations and increases the likelihood of a recession, economists believe
The US Federal Reserve System (FRS), which acts as the country’s central bank, kept the key rate at 4.25-4.5% per annum following a two-day meeting on March 18-19. This is stated in the regulator’s press release. At the previous meeting in January, the FRS also left the rate unchanged.
The press release following the March FRS meeting notes that economic activity in the US continues to grow at a steady pace, the unemployment rate has stabilized at a low level, while conditions in the labor market remain stable. However, the inflation rate remains slightly elevated, the FRS notes.
The American central bank points out that uncertainty about the economic outlook has now increased. Also following the meeting, the Fed decided to slow the pace of sales of bonds and mortgage-backed securities on the balance sheet (QT).
