New York (TIP): The Federal Reserve held interest rates steady and projected higher inflation, steady unemployment and only a single reduction in borrowing costs this year as officials took stock of economic risks from the US and Israeli war with Iran.
New projections from US central bank policymakers showed the Fed’s benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of the timing of such a move. That view was unchanged from previous projections and remains out of step with President Donald Trump’s demand for a sharp drop in borrowing costs.
US stocks pared losses slightly after the release of the Fed’s policy statement and projections, with the S&P 500 index last down about 0.6% and the Nasdaq Composite down about 0.5%.
US stocks pared losses slightly after the release of the Fed’s policy statement and projections, with the S&P 500 index last down about 0.6% and the Nasdaq Composite down about 0.5%.
The dollar pared its earlier gains, with the dollar index last up 0.27%. US Treasury yields also pared gains, with the 10-year yield last up at 4.214%.
Inflation, as measured by the Fed’s preferred gauge, was expected to end the year at 2.7%, not far below its current rate and higher than the 2.4% projected in December, possible fallout from the spike in global oil prices that followed the start of the bombing campaign against Iran.
“Implications of developments in the Middle East for the US economy are uncertain,” the Fed said in a policy statement that also noted ongoing stable unemployment.
This gave me a whole new perspective. Thanks for opening my eyes.