Jan. 29 (UPI) — Economists expect the Federal Reserve to keep interest rates unchanged as its Open Market Committee is set to conclude its meeting on Wednesday afternoon.
According to FactSet, over 90% of economists they polled expect the Fed to keep interest rates where they are — in a range of 4.25%-4.5% — not only at this meeting but at the March 19 meeting as well.
If that holds true, there wouldn’t be an interest rate cut until the May 7 Federal Reserve meeting at the earliest.
Villanova economics professor Erasmus Kersting told CBS MoneyWatch the Fed’s expected actions are based on inflation remaining higher than the central bank’s 2% goal. Kersting said the data the Fed is watching indicates that more rate cuts could trigger inflation to increase again.
Another factor in the bank’s expected decision is the uncertainty surrounding the Trump administration’s economic policies.
So after three straight interest rate cuts, the Fed is poised to stop and watch the data in part to see what policies the new administration will actually implement.
Dallas Fed President Robert Kaplan told CNBC that the best thing for the central bank to do is nothing – for now.
He said tariffs along with mass immigrant deportations will likely increase prices while increasing labor costs.
Kaplan said the Fed should even though President Trump wants more interest rate cuts now, the Fed should do its analysis and wait until the data gives the bank the confidence to take any further action.
