Fed Holds Interest Rates, Expects Two 25bps Cuts by Year-End
The Federal Open Market Committee (FOMC) has concluded its March meeting, maintaining current interest rates. Key points include:
- Committee members anticipate two 25-basis point rate cuts by year-end.
- Real GDP growth projections for 2025 have been lowered from 2.1% to 1.7%.
- Inflation expectations have risen, with PCE projected at 2.7% by the end of 2025.
- Mohamed El-Erian noted a potential shift in Fed communications regarding rate cuts, indicating they may occur due to declining economic growth rather than improving inflation.
- Bitcoin rose 1.3%, while ether increased by 7% before paring gains following the FOMC announcement. Stocks gained 0.6% and 0.9% respectively.
- The Atlanta Fed's GDPNow model revised Q1 2025 GDP forecast to a decline of 1.8%, an improvement from a previous estimate of -2.1%.