Federal Reserve Holds Rates Amidst Economic Uncertainty

The Federal Reserve is expected to hold interest rates steady at the 4.25%-4.50% range, awaiting clearer economic signals amidst unsettled trade and fiscal policies. Policymakers at the two-day meeting ending Wednesday face mixed data, including a downturn in first-quarter GDP and strong employment figures. The decision reflects uncertainty surrounding President Trump's policies and their potential impact on the economy. Conflicting inflation signals further complicate the outlook. While the Personal Consumption Expenditures Price Index slowed to 2.3% in March, underlying inflation remains higher. The potential impact of import tariffs on inflation adds another layer of complexity, requiring the Fed to assess whether rising prices are temporary or persistent. Investors anticipate the policy rate to remain unchanged until the Fed's July meeting.