Fed officials are worried about tariffs' impact on inflation and see rate cuts on hold, minutes show
Published On Feb 19, 2025, 2:01 PM
In the January 2025 Fed minutes, officials indicated a cautious approach towards interest rates, deciding to keep them steady after three previous cuts. They expressed concern about tariffs implemented by the Trump administration potentially impacting inflation. Much of the discussion revolved around needing clearer signs of inflation reduction before considering further rate adjustments. The Fed remains optimistic about the economy but acknowledges risks from trade policies and consumer demand, and has highlighted a target of keeping inflation below 2%.
Stock Forecasts
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Investors should be aware that prolonged discussions around tariffs and inflation management by the Fed could lead to volatility in the markets. As the central bank weighs fiscal policies and labor market conditions, sectors sensitive to interest rates (like real estate and utilities) may face downward pressure if inflation remains above targets.
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