#FOMCMeeting 🏦 Monetary Policy Decision

The Federal Reserve kept the federal funds rate in the range of 4.25%–4.50%, where it has been since December 2024.

Unanimous agreement except for one exception, reflecting the cautious stance of the FOMC in the face of economic uncertainty.

Key Reasons and Context

Global Uncertainty: Tension in the Middle East and trade tariff sanctions have generated volatility in oil prices, which could fuel inflation.

Mixed Economic Conditions: Although PCE inflation remains close to 2%, activity indicators such as retail sales and industry are weak.

Labor Market: Stability in employment is observed, although there are signs of potential weakening.

New Projections (SEP)

An upward revision in inflation and a downward revision in growth is expected, with a sense of stagflation (persistent inflation with slow growth).

Regarding the “dot plot”:

March anticipated two cuts of 25 bp, although new projections could reduce them to just one ✅.

Markets anticipate a single adjustment, potentially in September or October.