"The Federal Reserve (the Fed) held interest rates steady yesterday evening following three consecutive quarter-point cuts, reflecting a more complex policy backdrop, in line with Cebr expectations. The labour market weakened over the second half of 2025 but has showed signs of stabilising, while inflation remains elevated. Moreover, upside risks to inflation linger amidst indications of an economy running hot, with GDP growth amounting to an annualised 4.4% in Q3 and nowcasts pointing to a further acceleration in Q4 despite the government shutdown."
"Moreover, upside risks to inflation linger amidst indications of an economy running hot, with GDP growth amounting to an annualised 4.4% in Q3 and nowcasts pointing to a further acceleration in Q4 despite the government shutdown. Against this backdrop, the Fed's pause today likely reflects its preference to assess the transmission of earlier rate cuts and gather clearer signals on inflation and labour market conditions."
The Federal Reserve held interest rates steady after three consecutive quarter-point cuts to evaluate the effects of prior easing. The labour market weakened during the second half of 2025 but shows signs of stabilising, while inflation remains elevated and upside risks persist. GDP grew at an annualised 4.4% in Q3 and nowcasts suggest further acceleration in Q4 despite the government shutdown. The Fed's pause likely reflects a desire for clearer signals on inflation and labour market transmission from earlier cuts. Cebr anticipates at least two additional quarter-point cuts this year, conditional on potential Fed leadership changes when Chair Powell's term ends in May.
Read at London Business News | Londonlovesbusiness.com
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