Fed Plans Steady Policies Amid Economic Uncertainty

Federal Reserve Chair Jerome Powell has indicated that the Fed will maintain its current policies through 2025, with possible interest rate cuts starting in March 2026, amid ongoing economic uncertainty due to inflation and tariff disputes. Powell emphasized a cautious approach, stating that the Fed is not prepared to implement a 'Fed put' to stabilize markets despite recent stock declines. The Fed's decision-making process is complicated by conflicting signals from a strong labor market and rising tariffs, which threaten to impact economic growth. Powell reiterated the need for patience and greater clarity before making any significant monetary policy changes. Recent forecasts suggest inflation could remain persistent, with the Fed projecting growth rates of 0.8% for 2025 and 0.7% for 2026, highlighting a potential shift in economic dynamics. Investors are advised to brace for volatility in both equity and bond markets as these developments unfold.