The US Federal Bank (FED) will announce the interest rate decision after March 19 at 22:00 after the March meeting. Economists expect the FED to leave interest rates fixed, but uncertainty in the US economy continues. How do the Fed interest rate decision affect markets? How many interest rate reductions are expected in 2025? Here are the details…

Why is the US Federal Bank undecided?

While the FED generally increases interest rates when inflation rises, it tends to reduce interest rates against economic slowdown. However, the increase in inflation and economic recession are experienced at the same time. Experts predict that the FED may prefer to wait without any changes due to this contradictory situation.

The Fed is expected to announce the interest rate decision at 22:00 on Wednesday evening. Then, FED President Jerome Powell will hold a press conference. The markets will carefully follow Powell’s statements, although interest changes are not expected.

 

How many interest rate reductions are expected in 2025?

Economic experts estimate that the FED will make a twice a quarter -point interest rate reduction during 2025. However, the fact that inflation is still high and the increase in consumer expectations may lead to only one discount of the FED. In this case, fluctuations may occur in the markets.

Barclays predicts that the Fed will limit interest rate cutting forecast to a single discount. On the other hand, large financial institutions such as Deutsche Bank, Goldman Sachs and JPMorgan Chase remain expectation of two interest rate cuts. However, the course of inflation can cause these estimates to change.

Does the risk of stagflation increase in the USA?

Economists say that the US additional taxes on imported products can increase the risk of stagflation. Stagflation is defined as an economic situation in which high inflation is experienced at the same time with low economic growth and increasing unemployment. If this scenario occurs, the Fed intervene may become more complex.

Is the Fed interest rate reduction in 2025 a negative development?

The Fed usually reduces interest rates when inflation is controlled. At the end of 2024, interest rate cuts were considered as a positive signal showing that inflation has fallen. However, if there is a new interest rate reduction in 2025, this may be caused by negative reasons such as economic recession or re -rise of inflation.

 

Bankrate Chief economist Greg McBRide said, “The fall of interest rates may seem attractive for consumers and enterprises. However, the reason is important. We want to see interest rate cuts because of the decrease in inflation, not because of economic weakness,” he said.

Why did the Fed stop interest rate cuts?

In the last quarter of 2024, the Fed provided three interest rate reductions in a row. However, in January, interest rate cuts took a break. This pause was taken due to the fact that economic indicators gave mixed signals. Inflation is still not fully regretted to targeted levels, while economic growth remained strong. Therefore, the regulators decided to remain fixed for the interest rates for a while.

At the FED meeting held in December, the expectation of interest reduction for 2025 was reduced to four. However, depending on inflation and economic growth data, it is possible to reconsider these estimates.

LAST SITUATION IN MARKETS

On Wednesday, there was a positive opening in the markets. Investors are focused on the FED’s statements. Following the decision, fluctuations may be experienced in the stock exchanges. In particular, messages to be given on the future course of interest rates may determine market movements. As Kriptokoin.com, we have included the latest situation in the crypto currency market and expert expectations in this article before the FED interest rate decision.