The Federal Open Market Committee (FOMC) has opted to maintain US interest rates in the 3.5-3.75% range, as Jerome Powell prepares for his final press conference as Fed Chair. In his address, Powell highlighted the US economy’s steady growth, despite weak job creation and persistent unemployment. He noted that geopolitical tensions, particularly in the Middle East, are contributing to economic uncertainty and complicating the Fed’s mandate.

Powell’s remarks also pointed to a deteriorating short-term inflation outlook due to rising energy prices, although long-term expectations remain aligned with the Fed’s 2% target. The committee’s stance on future rate changes has become more flexible, with an increasing number of members open to both rate hikes and cuts, signaling that upcoming decisions will be data-driven and assessed on a meeting-by-meeting basis.

Market professionals should watch for potential shifts in monetary policy guidance at the next FOMC meeting, particularly in light of the evolving inflation landscape and geopolitical risks.

Source: xtb.com