The United States Federal Reserve is holding its first meeting of 2025 today and tomorrow and is expected to keep its interest rates steady at 4.25% to 4.5% on Wednesday, with high uncertainty about the level of inflation still in the limelight.
US President Donald Trump officially returned to the Oval Office on January 20 and has already signed numerous executive orders, promising to strengthen the country and bring its glory back. The reigning US head of state has been at the center of attention as he threatened to slap tariffs on various countries, including Canada and Mexico. He has also been eyeing the European Union and China. Many officials across the globe expressed worries about the potential moves as they could set the fight against inflation back.
While Trump previously insisted that he wouldn't seek Fed Chair Jerome Powell's resignation, he recently commented that he would demand for rates to "drop immediately" should energy prices fall. The US president further said that the central bank should follow his advice as he knows "more about rates" than them. Meanwhile, back in December, Powell remarked he wasn't concerned about the Fed losing its independence with Trump in office.
As the world is yet to see and feel the effects of Trump's policies, the Fed's future monetary policy path remains obscure.
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