#FOMCMeeting

On May 7, 2025, the Federal Open Market Committee (FOMC) concluded its meeting by maintaining the federal funds rate at the current range of 4.25% to 4.5%, marking the third consecutive meeting with no change in interest rates. This decision reflects the Federal Reserve's cautious approach amid rising economic uncertainties, particularly those stemming from recent trade policies and tariffs.

Key Highlights:

Interest Rates Unchanged: The FOMC opted to keep the benchmark interest rate steady, resisting external pressures for a rate cut.

Economic Concerns: Federal Reserve Chair Jerome Powell highlighted increased risks of both higher inflation and unemployment, largely influenced by the Trump administration's tariff policies. He emphasized the need for further data before making policy changes.

Market Reactions: Following the announcement, U.S. stock indices experienced brief declines but later recovered. The S&P 500 closed up 0.4%, the Dow Jones Industrial Average gained 0.7%, and the Nasdaq Composite increased by 0.3%. Bond yields eased slightly, and the dollar index strengthened.

Economic Indicators: In the first quarter of 2025, the U.S. GDP contracted by 0.3% annualized, a reversal from the 2.4% growth in the previous quarter. April saw the addition of 177,000 non-farm jobs, with the unemployment rate holding steady at 4.2%. Inflation remains above the Fed's 2% target, with the Personal Consumption Expenditures (PCE) price index at 2.4% in March. #FOMCMeeting