Adds Powell comments, economic projections.
Federal Reserve policymakers held their target interest rate unchanged today in their second meeting of 2025, and signaled two quarter-point cuts are still likely this year.
The Fed's Federal Open Market Committee (FOMC) held the federal funds rate unchanged at 4.25-4.50pc. This mirrored the decision made at the last FOMC meeting at the end of January, which followed rate cuts of 100 basis points over the last three meetings of 2024, which were the first cuts since 2020.
"Our current policy stance is well positioned to deal with the risks and uncertainties we are looking at," Fed chair Jerome Powell told journalists after the meeting. "The economy seems to be healthy."
Powell acknowledged some of the negative market sentiment in recent weeks, which he said "... probably has to do with turmoil at the beginning of an administration."
"We kind of know there are going to be tariffs and they tend to bring growth down and they tend to bring inflation up," he said, but long-term inflation expectations are "well anchored."
In December the Fed said it expected 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents.
Policymakers and Fed officials Wednesday lowered their estimate for GDP growth this year to 1.7pc from a prior estimate of 2.1pc in the December economic projections. They see inflation rising to 2.7pc for 2025 from the prior estimate of 2.5pc.
