(AURN News) — The Federal Reserve left interest rates unchanged Wednesday, with Chair Jerome Powell citing solid economic growth while acknowledging growing uncertainty about the outlook.
“Recent indications, however, point to a moderation in consumer spending following the rapid growth seen over the second half of 2024. Surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment,” Powell said during a press conference.
The central bank’s decision comes amid mixed economic signals, with the labor market remaining resilient but consumer spending showing signs of cooling after strong growth in late 2024.
“In the labor market conditions remain solid. Payroll job gains averaged 200,000 per month over the past three months, the unemployment rate at 4.1% remains low and has held in a narrow range for the past year,” Powell added.
Powell directly addressed the potential economic impact of policy changes under the Trump administration.
“Looking ahead, the new administration is in the process of implementing significant policy changes in four distinct areas, trade, immigration, fiscal policy and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy,” he said.
“While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their effects on the economic outlook is high. As we parse the incoming information, we’re focused on separating the signal from the noise as the outlook evolves,” Powell said.
In its official statement, the Federal Reserve noted: “Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”
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