Fed dampens US growth prospects as Powell warns of tariffs' inflationary impact

Too early to look through inflation

The US Federal Reserve has cut its growth expectations for the US amid the continuing inflationary repercussions of President Donald Trump’s tariff agenda, coupled with other inflationary pressures.

In its meeting on Wednesday (19 March), the Federal Open Market Committee (FOMC) voted to maintain the current federal funds rate at 4.25%-4.5%.  Notes from the meeting revealed the FOMC decided to slash its GDP expectations for the US from its previous December 2024 predictions.  Federal Reserve holds rates steady as inflation 'remains a primary risk' During 2025, the FOMC expects the US economy to expand by 1.7%, down from the 2.1% anticipated at the end of last year.  Similarly, US growth forecasts for 2026 and 2027 were cut from their December levels to 1.8% each year, down ...