WASHINGTON—The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from President Donald Trump.
The Fed cut its key lending rate by a full percentage point in the last four months of 2024 and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of two percent.
“I think they will do nothing, and I think they should do nothing,” Jim Bullard, the long-serving former president of the St. Louis Fed, told AFP. “I think the committee’s in very good shape right now.”
The Fed’s challenge this week is how to pause and communicate a data-dependent approach to future cuts without drawing the ire of the commander-in-chief, who has expressed his desire for rates to come down.
“The goal will be to make as least amount of news as possible as they pause, which is well televised,” KPMG chief economist Diane Swonk said in an interview. AFP