#FOMCMeeting

' KEY POINTS OF FOMC MEETING 6-7th of May '

1. Interest Rates Held Steady

The Fed opted to keep interest rates unchanged, citing the need for more data to assess the full impact of recent economic developments, particularly the tariffs introduced in April. These tariffs include a 10% global import tax and up to 145% on Chinese goods, which are expected to influence inflation and economic growth.

2. Mixed Economic Signals

While the labor market showed strength with 177,000 jobs added in April, other indicators such as a contraction in first-quarter GDP and declining business confidence suggest potential economic headwinds. Inflation remains a concern, with core inflation above 2.6%, and the new tariffs may exacerbate price pressures.

3. Market Expectations Adjusted

Following the meeting, market expectations for near-term rate cuts have diminished. The probability of a rate cut at the June meeting has decreased, with markets now anticipating potential cuts later in the year, possibly starting in July.

4. Fed's Forward Guidance

Fed Chair Jerome Powell emphasized a data-dependent approach, stating that the central bank will closely monitor incoming economic data before making further policy adjustments. The Fed aims to balance its dual mandate of promoting maximum employment and stabilizing prices amid the current economic uncertainties.

The next FOMC meeting is scheduled for June 17–18, 2025. Until then, the Fed is expected to continue its assessment of economic conditions to determine the appropriate course for monetary policy.