Federal Reserve Maintains Rates Amid Inflation Concerns

Economists predict that the U.S. Federal Reserve will keep interest rates steady at 4.25%-4.50% during its upcoming meeting while considering potential rate cuts in March, largely influenced by the economic policies of President-elect Donald Trump. Concerns surrounding Trump's proposed tariffs and tax cuts may complicate the Fed's ability to lower rates, especially with persistent inflation pressures reflected in recent economic data. Similarly, the Bank of Japan is expected to raise interest rates next week, contingent on market reactions to Trump's inauguration, amid steady wholesale inflation driven by rising food and fuel costs. Analysts suggest that the BOJ will maintain a hawkish stance if the economy continues to recover without market disruptions. In the U.S., inflation remains above the Fed's target, complicating the monetary policy landscape as the government faces a significant debt crisis, with rising borrowing costs further straining finances. Overall, both central banks are navigating complex economic conditions that may affect their respective monetary policies in the near future.