Federal Reserve Chairman Jerome Powell maintained a steady course at the January meeting, keeping interest rates between 4.25% and 4.50%.
Amid political pressure and uncertainty around potential tariffs, Powell emphasized a data-driven approach, declining to comment on presidential statements or speculate about future policy changes.
This cautious stance, combined with potential inflation concerns from new tariffs, suggests the Fed might forgo rate cuts entirely in 2025 – a possibility that challenges market expectations of second-half rate reductions.
Powell’s “wait and see” approach, particularly regarding uncertain tariff policies and their economic effects, underscores the Fed’s focus on concrete evidence over speculation in guiding monetary policy.