In this news:
WASHINGTON, DC - MARCH 19: Federal Reserve Chairman Jerome Powell pauses while delivers remarks at a ... [+] news conference following a Federal Open Market Committee (FOMC) meeting at the Federal Reserve on March 19, 2025 in Washington, DC. Despite uneasiness in global markets, Powell announced that the central bank’s benchmark interest rate will remained unchanged at a range of 4.25% to 4.5%. (Photo by Kevin Dietsch/Getty Images)
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Most people weren’t expecting the Federal Reserve’s Federal Open Market Committee to cut interest rates, and they didn’t. The benchmark federal funds range — the range of interest rates banks charge one another for overnight borrowing — remains 4.25% to 4.50%.
The real news is in everything else.
Where The Economy Was Going
Until December 2024, the growing assumption was that after a period of swiftly growing inflation and then time with higher short-term interest rates the Fed used to control the price increases, the country was coming to a rare so-called soft landing, where inflation would finally return to normal without a recession.
The assumption had been that interest rates would continue to drop as the Fed became more convinced that its dual mandate — maintaining stable prices and maximum sustainable employment — was in hand. Fed Chair Jerome Powell’s speech and Q&A session after the close of the FOMC meeting made it clear that the happiest result isn’t a given.
The FOMC statement noted that starting in April the Fed would “slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion.”
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