Awaiting Potential Tariffs Effect, Fed Chooses Not to Make Rate Change

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“Looking ahead, the new administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy and deregulation. It is the net effect of these policies that will matter for the economy and for the path of monetary policy,” said Federal Reserve Chair Jerome Powell.

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By Michael Catarevas

March 19, 2025

Reading Time: 4 mins read

As had been widely speculated, the Fed on March 19 decided to leave its benchmark interest rate unchanged at 4.50%, its second consecutive meeting of keeping interest rates unchanged. Uncertainty about the U.S. economy and the effect of President Trump’s tariffs policy were likely reasons for the non-action. The central bank kept rates steady in January after reducing them by 1% last year due mostly to signs of cooling inflation. The Fed is still projecting two rate cuts in 2025.