The US Federal Reserve left the key policy rate in the range of 4.25-4.5%

The regulator raised its inflation forecast and downgraded its GDP growth expectations

On March 19, the US Federal Reserve System (FRS) maintained the federal funds rate in the range of 4.25-4.5% per annum. This is stated in the report of the Federal Open Market Committee (FOMC).

As noted, the latest indicators show that economic activity in the country continues to develop at a steady pace. In recent months, the unemployment rate has stabilized at a low level, labor market conditions remain stable, and inflation has been slightly elevated.

The FOMC is committed to achieving maximum employment and inflation of 2% in the long run. However, the committee notes that uncertainty about the economic outlook has increased, and the Fed’s management will monitor risks to its objectives.

At the same time, the regulator updated its economic forecasts for the current year and 2026.

The Fed has raised its inflation forecast (PCE index) in the US for 2025 to 2.7% from 2.5% in the December forecast, and for 2026 to 2.2% from 2.1%.

The regulator also downgraded its forecast for US GDP growth for the current year to 1.7% from 2.1% in December, and to 1.8% from 2% in 2026. The Fed anticipates that the base interest rate will fall to 3.9% by the end of 2025. The expectation for the end of 2026 is 3.4%, and for the end of 2027 – 3.1%.

Last December, the Fed cut its key policy rate by 25 basis points to 4.25-4.5% per annum, and in January 2025 it left it in this range.