Washington (AFP) – The US Federal Reserve began a two-day discussion over interest rates Tuesday, with policymakers widely expected to pause again and wait for clarity on the economic impact of Donald Trump’s tariff rollout. The US president’s on-again, off-again rollout has unnerved investors and caused analysts to pare back their forecasts for growth this year and to hike their inflation outlook.
This is a challenging situation for the Fed’s rate-setting committee, which began its two-day meeting in Washington at 8:30 am local time (1230 GMT). The US central bank has a dual mandate to tackle both inflation and unemployment, primarily by hiking and lowering its benchmark lending rate, which acts like a throttle or brake for demand.
Both the inflation and unemployment rates are close to where the Fed wants them, making another rate cut pause this week overwhelmingly likely. That would leave the bank’s key lending rate at between 4.25 percent and 4.50 percent, where it has sat since last December. Financial markets see a roughly 97 percent chance that the Fed will vote to pause this week, according to data from CME Group.
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