The Federal Reserve’s benchmark rate will remain unchanged on Wednesday. But that’s almost the only thing that remains the same as it was when Chairman Jerome Powell and his colleagues last met in December 2024.
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US Fed Meeting LIVE: The US Federal Reserve will announce its first policy decision for 2024 after a two-day Federal Open Market Committee (FOMC) meeting today. This is the first interest rate decision of the US central bank since Donald Trump took charge as the 47th US President on January 20.
In the December policy meeting, US Fed policymakers voted 11 to 1 to slash the benchmark interest rate by 25 basis points (bps) or (1/4) quarter of a percentage point to 4.25 – 4.50 per cent, in line with Wall Street estimates. That was the US central bank’s third straight interest rate cut of 2024 and the second straight 25 bps rate cut after the November decision.
US Fed chair Jerome Powell-led rate-setting panel now envisions only one or two rate cuts in 2025 after the latest US inflation prints revealed that consumer prices still remain ‘somewhat elevated’ in the world’s largest economy.
The US Federal Reserve has a dual mandate to act independently and keep inflation and employment in check, primarily by raising and lowering short-term interest rates. Experts believe that under Trump’s presidency, there has been a distinct shift in the dynamics between the administration and the US Fed.
After raising the policy rate by 5.25 percentage points since March 2022 in one of the swiftest Fed reactions to combat the worst outbreak of inflation in 40 years, the central bank has held the rate on hold since July 2023 to anchor in high inflation and consistently bring it down toward the two per cent target range.
