The Fed decided to maintain interest rate within the range of 4.25–4.50% on January 30, 2025. Fed Chair Jerome Powell stated that the U.S. central bank required a temporary pause to further observe inflation trends following a prior rate reduction at the end of the previous year (19/12). This policy was adopted due to the continued strength of the U.S. economy and the diminished restrictive impact of interest rates on economic activity compared to earlier periods. Additionally, stable labor market conditions allowed Fed policymakers to delay adjustments to the benchmark rate until more concrete evidence of a sustained decline in inflation materializes. As measured by the Personal Consumption Expenditures (PCE) Price Index, inflation data stood at 2.40% year-over-year (YoY) in November 2024, while market consensus projections anticipated an increase to 2.60% YoY in December 2024.
By PHINTRACO SEKURITAS | Research
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