Federal Reserve Expected to Maintain Interest Rates Amid Inflation Concerns
US stocks today: Fed likely to hold rates steady at what may be last meeting of Powell era
The Economic Times
Image: The Economic Times
The Federal Reserve is likely to keep interest rates steady in what may be Jerome Powell's final meeting as chair, amid rising inflation fears linked to high oil prices due to geopolitical tensions. The Fed's preferred inflation measure exceeds its 2% target, complicating future monetary policy decisions.
- 01Federal Reserve expected to hold interest rates steady at upcoming meeting.
- 02Rising oil prices, currently above $110 per barrel, raise inflation concerns.
- 03Jerome Powell's tenure as Fed chair ends on May 15, with Kevin Warsh poised to take over.
- 04Strong job growth has reduced the unemployment rate to 4.3%.
- 05Inflation data expected to worsen before the Fed's next policy meeting.
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The Federal Reserve is anticipated to keep interest rates unchanged during its upcoming meeting, which could mark Jerome Powell's last as chair. Rising oil prices, now exceeding $110 per barrel amid the U.S.-led conflict with Iran, have heightened concerns about persistent inflation, with the Fed's preferred inflation measure currently above its 2% target. Analysts predict that the Fed will refrain from signaling any immediate rate hikes, despite the strong job growth that has lowered the unemployment rate to 4.3%. Powell's term as chair concludes on May 15, while Kevin Warsh is expected to be confirmed as his successor. The Senate Banking Committee has already recommended Warsh's nomination, following the dismissal of a criminal investigation that had previously clouded Powell's leadership. The Fed's policy statement and decision will be released at 2 p.m. EDT (1800 GMT), with Powell scheduled for a press conference shortly after.
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The Fed's decision to maintain interest rates may affect borrowing costs for consumers and businesses, potentially keeping loan rates steady in the short term.
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