The Federal Reserve's recent statement reflects a solid but cautious economic expansion, highlighted by a stable low unemployment rate. However, inflation remains a concern, prompting the FOMC to lower GDP growth forecasts for 2025 from 2.1% to 1.7% and anticipate an unemployment increase to 4.4%. Despite these challenges, a gradual decline in mortgage rates is expected over the summer. The Fed's battle against inflation also includes considerations of tariff impacts, highlighting the complexities policymakers face amidst external pressures for lower rates to boost economic activity.
The Federal Reserve's ongoing efforts to combat stubborn inflation are affecting American households, with concerns about tariff-related price increases that may prolong high interest rates.
FOMC's revised GDP growth forecast reflects a cautious economic outlook, lowering expectations from 2.1% to 1.7% while anticipating an uptick in the unemployment rate to 4.4%.
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