Fed Navigates Economic Uncertainty Amid Tariff Talks

The Federal Reserve maintained interest rates but projects a rate cut due to economic slowing. Inflation estimates rose from 2.5% to 2.7%, while growth forecasts dropped from 2.1% to 1.7%. Despite tariff concerns, monetary policy remains stable with potential rate cuts ahead, highlighting increased economic uncertainty.

In a widely anticipated move, the Federal Reserve held interest rates steady on Wednesday, yet signaled potential rate cuts by year-end due to faltering economic growth and potential inflation decline.

The Fed adjusted its inflation expectations upwards to 2.7% for the end of the year, amid tariff uncertainties under the Trump administration, while economic growth projections were revised downwards to 1.7%.

Despite heightened uncertainty, U.S. markets responded positively to the Fed's policy statement, with minor gains in the stock market as the central bank focuses on maintaining stable monetary policy amid potential tariff impacts.

(With inputs from agencies.)