#FOMCMeeting The Federal Open Market Committee (FOMC or the Committee) kept the federal funds rate unchanged at 4.25% - 4.50% for the third consecutive meeting, thus continuing a pause in the interest rate cut cycle that began in September 2024. The FOMC stated that uncertainty about the economic outlook has increased further, as have the risks of higher unemployment and inflation. The Federal Reserve (Fed) will continue to reduce its holdings of securities at a pace of $5 billion in U.S. Treasury bonds and $35 billion in agency mortgage-backed securities each month.

To achieve its goals, the Committee decided to keep the federal funds rate unchanged in the range of 4.25% to 4.50%. Uncertainty about the economic outlook has increased. The Committee is attentive to risks on both sides of its dual mandate (price stability and full employment) and considers that the risks of higher unemployment and inflation have increased.

We believe that the Fed wants to maintain flexibility on when to implement new interest rate cuts. In our opinion, the Fed will maintain the pause until economic data begins to confirm the slowdown. We believe the Fed will have the opportunity to cut rates later in the year if the economic slowdown materializes and as long as inflation allows.