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Fed Holds Rates Steady, Signals Two Cuts Ahead in 2025
The U.S. Federal Reserve announced Wednesday that it will keep interest rates unchanged, maintaining its benchmark range at 4.25% to 4.5% for the fourth consecutive meeting. Despite concerns over inflation and slower economic growth, officials reaffirmed their expectation of two rate cuts later this year, with projections indicating a year-end rate of **3.9%.
The Fed's latest forecast suggests inflation will rise to 3% by the end of 2025, up from the 2.7% projected in March. Additionally, the unemployment rate is expected to reach 4.5%, slightly above the previous estimate of 4.4%. Economic growth projections have also been revised downward, with GDP now expected to expand by 1.4%, compared to the earlier forecast of 1.7%.
Federal Reserve Chair Jerome Powell emphasized the central bank's cautious approach, stating that while inflation remains a concern, the Fed is committed to balancing economic stability with necessary policy adjustments. The decision comes amid ongoing uncertainty surrounding global trade policies and geopolitical tensions, which continue to impact financial markets.
With two rate cuts still anticipated before the end of the year, investors and businesses will closely monitor upcoming Fed meetings for further guidance on monetary policy shifts.
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