FED Maintains Interest Rates: What is the Market Waiting For?
1. Decision to Maintain Interest Rates: A Predictive Step
On May 7, 2025, after a two-day policy meeting, the Federal Reserve (FED) decided to maintain the benchmark interest rate at 4.25%–4.50%. This rate has been maintained since late 2024.
2. Establishing the 'Wait and Observe' Framework of the FED
Chairman J. Powell emphasized that the agency will continue to monitor economic data before making any adjustments to monetary policy. He stated: 'It's not about how much to cut %, but when is what we consider.'
3. Economic Risks Highlighted by the FED
The FED warns that the economic outlook is increasingly uncertain, with risks of inflation and unemployment both on the rise. The agency is particularly attentive to risks affecting its dual goals of price stability and maximizing employment.
4. Market and Investor Reactions
Financial markets reacted quite calmly to the FED's decision to maintain interest rates. Cryptocurrency markets, especially Bitcoin and Ethereum, held steady at current price levels, as traders awaited Powell's comments for clues about future interest rates.
5. Relationship Between the FED and the Trump Administration
FED Chair J. Powell was also asked about his relationship with President Trump, as well as the possibility of being replaced after his current term. He declined to comment on the matter and stated that the only current goal is to conduct sound policy for the American people.
6. Conclusion: The Market is Waiting for Clearer Signals
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