Federal Reserve to Hold Interest Rates Steady Amid Inflation and GDP Concerns

The Federal Reserve has firmly decided to maintain interest rates, keeping its borrowing rate between 4.25% and 4.5%. This decision regarding the December 2024 borrowing rate stems from significant concerns about the President’s tariff strategy, a slowing economy, the administration’s ambitious tax break plans, and the deregulation of critical industries.

Federal Reserve Chair Jerome Powell asserted, “If the economy remains robust and inflation does not sustainably move toward 2%, we will maintain policy restraint for an extended period.” He further emphasized, “Should the labor market weaken unexpectedly or inflation decline more rapidly than anticipated, we will adjust our policy accordingly.”

The Federal Reserve has revised its GDP growth outlook to 1.7%, which reflects a decisive decrease of 0.4 percentage points from the previous year. Furthermore, inflation on core prices is projected to grow at an annual rate of 2.8%, representing an increase of 0.3 percentage points from earlier estimates.

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