Fed's Powell: Economy is in solid position

Fed's Powell: Economy is in solid position

Federal Reserve Chair Jerome Powell is expected to keep interest rates unchanged at the end of this week's two-day meeting, despite political pressure to make cuts. The Fed last lowered interest rates in December, bringing its benchmark short-term rate to a range of 4.25% to 4.5%. Since then, the central bank has kept rates flat amid uncertainty on how tariffs will impact inflation and the economy [1].

Powell has maintained the Fed's wait-and-see approach despite President Donald Trump's calls for cuts. Trump has repeatedly criticized Powell, arguing that lower interest rates would boost the economy and save the government money on its debt. However, Powell has stated that the Fed is comfortable with its policy stance and that it is waiting to see how things evolve [1].

The Fed expects inflation to worsen in the coming months but still foresees two interest rate cuts by the end of this year. Despite the gloomier outlook, the Fed has held off from any changes to its key rate due to uncertainty surrounding the impact of tariffs and the economic outlook. The central bank expects inflation to rise to 3% by the end of this year and the unemployment rate to rise to 4.5% [2].

Investors are nearly certain that the central bank will keep its benchmark interest rate unchanged on Wednesday. The Fed's rate-setting committee has expressed concern about the potential impact of tariffs and other factors on the economy. The U.S. economy is currently solid, with low unemployment and easing inflation, but the Fed faces significant challenges in the coming months [3].

The U.S. economy remains stable, with low unemployment and easing inflation, but the Federal Reserve faces uncertainty amid trade tensions and tariff-related risks. The Fed is closely monitoring the impact of tariffs and other factors on the economy and is prepared to adjust its policy stance if necessary [4].

References:
[1] https://www.usatoday.com/story/money/2025/06/18/federal-reserve-interest-rate-decision-live-updates/84241288007/
[2] https://www.barchart.com/story/news/32933136/federal-reserve-leaves-its-key-rate-unchanged-but-sees-two-cuts-this-year
[3] https://www.npr.org/2025/06/18/nx-s1-5435683/fed-june-meeting-rate-economy
[4] https://unb.com.bd/category/Business/us-erconomy-remains-stable-but-federal-reserve-faces-uncertainty/162112