The Federal Reserve has released its projections for the world’s largest economy which shows a reduction in the country’s growth forecast and a warning that the tariffs were driving up prices.
The Fed held interest rates, which was the expectation, leaving rates unchanged to give the economy more time to play itself out. The benchmark interest rate has been around 4.3 percent since December. After the announcement, President Trump called on it to cut rates. “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy,” the U.S. President said on his platform Truth Social.
Fed chairman Jerome Powell said the economy maintained a healthy appearance, despite a sharp downturn in sentiment and “remarkably high” uncertainty, but the tariffs would slow growth and hinder the bank’s ability to keep prices stable.
Forecasts show inflation is expected to stand at 2.7 percent by the end of the year, up from the 2.5 percent predicted in December, but still above its 2 percent target.
