The US Federal Reserve makes no changes to the policy rate

The US Federal Reserve (Fed) has announced its fifth interest rate decision of 2025. Accordingly, the Federal Open Market Committee (FOMC) kept the policy rate unchanged in the 4.25-4.50 percent range, in line with market expectations.

The FOMC, which implemented 25 basis point rate cuts in November and December of last year, had lowered the rate by 50 basis points in September. In 2025, it has chosen to keep the rate steady at all meetings held so far.

AN INTEREST RATE CUT MAY BE ON THE AGENDA IN SEPTEMBER

Emphasizing that the expected impact of tariffs is pulling the Fed in two opposite directions, Marey stated, "While the upward pressure on inflation could be a reason for a rate hike, the downward pressure on economic growth could be a reason for a rate cut. Therefore, we believe the Fed's reactions will be slow and moderate. For now, we expect only one rate cut for the remainder of the year. This cut will most likely take place in September," he assessed.

Marey noted that the Fed appears to have limited room to rescue economic activity, stating that the Bank must also maintain its credibility while fighting inflation.

US President Trump has also been repeatedly pressuring the Fed chair, suggesting that interest rates should be lowered.

FED INTEREST RATE MEETING CALENDAR

September 16-17, 2025

October 28-29, 2025

December 9-10, 2025

News Source: 12punto