The Federal Reserve announced Wednesday that it would hold its interest rates steady in its second meeting of 2025.
The Fed’s decision to maintain its target range at 4.25% to 4.5% met economists’ expectations. The announcement comes after the consumer price index, a broad measure of the price of everyday goods, rose 0.2% in February, the Bureau of Labor Statistics reported on March 12.
The central bank similarly decided to hold interest rates steady in its January meeting. In 2024, the Fed cut interest rates three consecutive times, a half point cut in September, a quarter point cut in November and a quarter-point cut in December.
Notably, there was a significant spike in inflation during former President Joe Biden’s four-year term, which led to many Americans having difficulty making ends meet. Ahead of President Donald Trump’s November 2024 election victory, the economy was ranked as a major issue among voters.
In a March 7 speech to economists in New York, Fed Chair Jerome Powell emphasized that “there is no need to be in a hurry” as central bankers seek “greater clarity” on where the state of the economy under the Trump administration is headed.
Since returning to the Oval Office, Trump has taken a handful of actions aimed at bolstering the U.S. economy, including signing a Jan. 20 executive order aimed at “unleashing” American energy, which he claimed would “restore American prosperity — including for those men and women who have been forgotten by our economy in recent years.” The same day, Trump unveiled a presidential memorandum to defeat the “cost-of-living crisis” in the U.S., which ordered all federal agencies and departments to “deliver emergency price relief, consistent with applicable law, to the American people and increase the prosperity of the American worker.”
“Over the past 4 years, the Biden Administration’s destructive policies inflicted an historic inflation crisis on the American people,” Trump wrote in the memorandum. “The Biden Administration not only exploded Government spending, artificially and unsustainably stimulating demand, but it simultaneously made necessary goods and services scarce through a crushing regulatory burden and radical policies designed to weaken American production. Hardworking families today are overwhelmed by the cost of fuel, food, housing, automobiles, medical care, utilities, and insurance.”
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