As of today, March 19, 2025, the Federal Open Market Committee (FOMC) concluded its latest meeting, which took place over March 18–19. Here’s a summary of the resolution based on the most current information available:
Interest Rates: The FOMC decided to maintain the federal funds rate target range at 4.25%–4.50%, marking the second consecutive meeting with no change. This decision aligns with market expectations and reflects a cautious, data-dependent stance amid economic uncertainties.
Economic Projections: The committee released updated forecasts in its Summary of Economic Projections (SEP). Notably, it lowered its median real GDP growth projection for 2025, signaling a more pessimistic view on economic expansion. Conversely, it raised its inflation outlook, indicating stickier price pressures than previously anticipated. The "dot plot" showed a median expectation of two 25-basis-point rate cuts (totaling 50 basis points) by the end of 2025, unchanged from the December 2024 forecast, though four officials now project no cuts, suggesting a hawkish tilt among some members.
Policy Stance: The FOMC statement emphasized that risks to its dual mandate—maximum employment and price stability—remain balanced. However, Fed Chair Jerome Powell, in the subsequent press conference, highlighted “unusually elevated” uncertainty due to new policy maneuvers under the Trump administration, such as tariffs, which could influence growth and inflation. The committee reiterated its commitment to monitoring incoming data closely, leaving flexibility for future adjustments.
Quantitative Tightening (QT): The Fed signaled that its balance sheet reduction (QT) will continue, though at a slower pace, providing some support to liquidity without reversing its tightening stance.
Market Implications: The resolution has been interpreted as mildly dovish in tone due to the acknowledgment of weaker growth, but the unchanged rate-cut projection and higher inflation forecast suggest a stagflationary concern—where growth slows but inflation persists—without a corresponding easing response.
This resolution reflects the Fed’s current wait-and-see approach, balancing a solid labor market and moderating inflation against emerging risks like trade policy shifts.
