Accountancy Slice

North America

Federal Reserve officials kept the key interest rate unchanged at 4.25%-4.5% for their fourth straight meeting. Along with the rate decision, the committee indicated, through its closely watched “dot plot,” that two cuts by the end of 2025 are still on the table. The plot indicated continued uncertainty from Fed officials about the future of rates. Each dot represents one official’s expectations for rates. There was a wide dispersion on the matrix, with an outlook pointing to a fed funds rate around 3.4% in 2027. In a post-meeting statement, the Fed’s rate-setting committee said uncertainty about the economic outlook has “diminished,” but said it’s still watching closely for risks related to both inflation and unemployment. Fed Chair Jerome Powell said after the release that the Fed needs more confidence about the path of inflation. “Without tariffs that confidence would be building,” he commented. “We have to learn more about tariffs. I don’t know what the right way for us to react will be. I think it’s hard to know with any confidence how we should react until we see the size of the effects.” Commenting on President Donald Trump's criticisms - on Wednesday he called him "a stupid person" - Mr. Powell said the Fed is "well-positioned" to deliver "a good solid American economy," adding: "Pretty much that's all that matters to us."