The US Federal Reserve (FED) has just released its latest economic outlook update, lowering the US GDP growth forecast for 2025 to 1.4%, compared to the 1.7% projected in the previous March report. Simultaneously, FED has raised the inflation forecast for 2025 to 3%, higher than the 2.8% previously predicted at the beginning of the year.
This adjustment reflects FED's more cautious view of the medium-term US economic outlook. The slower growth rate indicates concerns about the economy's momentum after a prolonged monetary tightening period, while inflationary pressures remain persistent and not yet fully controlled.
According to analysts, FED's lowered GDP expectations but raised inflation forecast signals that the US Central Bank is facing a dual challenge: supporting growth while containing inflation to return to the 2% target. This could directly impact interest rate policies in the coming period and have far-reaching effects on financial markets, businesses, and US consumers.
Previously, the Fed decided to maintain the standard interest rate in the range of 4.25% - 4.50%. This is the fourth consecutive time the Fed has kept the rate unchanged, as predicted by most investors and market analysts. This move reflects the US central bank's caution in the face of unstable inflation and economic growth signals.
Also Read: Fed Continues to Maintain Interest Rates, Forecasts 2 Reductions This Year
