US Fed Result: The US Federal Reserve left its benchmark interest rate unchanged at 4.24%-4.50% on Wednesday (March 19) and signalled that it expects to cut rates twice this year. The Jerome Powell-led FOMC kept the rate unchanged for the second time in a row, although it said the outlook is more uncertain. The Fed also released its quarterly economic projections, projecting the economy to grow more slowly this year and next year than it did three months ago.
The Fed also predicted that the unemployment rate would rise to 4.4% by the end of this year, which will be a matter of concern. Moreover, the committee expect inflation to rise slightly this year, rising to 2.7% from the current level of 2.5%, remaining above the central bank's 2% target.
The US Fed after its two-day meeting said that uncertainty about the economic outlook has increased. The forecasts underscore the difficult position the Fed faces this year. Higher inflation usually prompts the Fed to raise its key rate or keep raising rates.
On the other hand, slower growth and higher unemployment often cause the Fed to cut rates, spurring more borrowing and spending and boosting the economy.
In its previous monetary policy review in January 2025, the US Federal Reserve had left its key interest rates unchanged at 4.25-4.50 per cent.
Earlier, on December 18, 2024, the US Federal Reserve announced a 25 basis point cut in key interest rates to a range of 4.25-4.50 per cent. This was the third rate cut by the FOMC in three months, with the first-rate cut, which was 50 basis points, announced in September and the second-rate cut, which was 25 basis points, announced in November. The first-rate cut in the current rate cut cycle came in September after a four-year gap since 2024.
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