Fed Holds Rates Steady and Updates Outlook: On Wednesday, the U.S. Federal Reserve decided to keep the federal funds rate unchanged at 4.5%,
in line with broad market expectations.
Recent indicators showed that economic activity continues to grow steadily,
with the unemployment rate remaining low in recent months,
reflecting stable labor market conditions.
Inflation remains elevated, and the committee aims to achieve
maximum employment and stable inflation at the 2% target over the long term.

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Economic Projections

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Uncertainty surrounding the economic outlook has increased,
and the committee is paying close attention to risks affecting its objectives.
The Fed decided to maintain the target range for the interest rate at 4.5%
while carefully assessing incoming data and evolving forecasts before making any future decisions.
It will also continue reducing its Treasury securities, agency debt, and mortgage-backed securities holdings.
Starting in April, the Fed will slow the pace of balance sheet reduction
by lowering the monthly cap on Treasury redemptions from $25 billion to $5 billion

while keeping the agency debt and mortgage-backed securities cap at $35 billion.

The Federal Reserve remains committed to supporting maximum employment
and bringing inflation back to the 2% target
and will continue to monitor the effects of economic data on its outlook.
The Fed also stands ready to adjust its monetary policy if risks impede achieving its objectives,
considering a wide range of information, including labor market conditions,
inflationary pressures, and financial and international developments.

Economic Projections

The March economic projections show that the U.S. economy
is expected to grow by 1.7% this year and by 1.8% during 2026 and 2027,
as well as over the long term.
In contrast, the December projections indicated growth of 2.1% in 2025,
around 2.0% in 2026 and 1.9% in 2027.
The unemployment rate is projected to stabilize at 4.4% in 2025,
4.3% in 2026 and 2027 and 4.2% over the long term.
Inflation is expected to settle at 2.7% this year, 2.2% next year,
and 2.0% in 2027 and beyond, compared to previous projections of 2.5% in 2025 and 2.1% the following year.

Analysts expect core inflation to reach 2.8% this year, 2.2% next year, and 2.0% in 2027.

Analysts project interest rates to stabilize at 3.9% in 2025 and 3.4% the following year.

and 3.1% in 2027, settling around 3.0% over the long term,
which aligns with previous forecasts indicating similar levels.

Fed Holds Rates Steady and Updates Outlook

Fed Holds Rates Steady and Updates Outlook

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