Federal Reserve’s future policy path ‘highly uncertain’ as Powell downplays forecasts on heels of Trump unknowns

The Federal Reserve continued to indicate that it will reduce interest rates twice this year, with the head of the Federal Reserve, Jerome Powell, adopted a perceived position, and a pleasant surprise for investors who reached a decision on Wednesday’s policy with increasing concerns of “recession” and the possibility of stagnation of the United States.

“It is a clearing event.” “You did not get the Federal Reserve, which would have accelerated the negative side in the market.”

Read more: How does the Federal Reserve Price decision affect your bank accounts, loans, credit cards and investments

One of the major reasons stems from the “Foundation Case” of the Federal Reserve, that inflation caused by customs tariffs will be “temporary” and has a single -term effect in the short term on price growth. This was reflected in the central bank’s expectations, which expected inflation at the end of the year to 2.7 % before reaching its 2 % goal by 2027-“relief for investors” who were preparing more valuable prices, according to Depossery.

But some experts warn that “transit” inflation is still unrealistic-and that the expectations for this year’s price discounts can collapse as the Trump administration continues to flip the commercial policy. “There is a level of stagnation” to stay consistent with the previous expectations until more clarity appears.

“The uncertainty was the most prominent in the statement,” wrote Rick Reader, chief global investment of fixed income in Blackrock, in response to Wednesday’s decision. “Like the market participants, the Federal Reserve is at a very unconfirmed point, and it needs time and data to determine the next procedure course.”

Each of the consumer enlargement and the product showed a slowdown in price growth during February. But the details under the surface indicated that a possible stoppage of the Federal Reserve’s goal by 2 %, with tariffs of definitions as the biggest threat to the Powell “transition”.

There are also fears that the Federal Reserve may reduce rates due to weak labor market and slow economic growth – a step that investors will not chant.

“Everyone wants discounts, three discounts and four discounts. You don’t want any discounts. You want to grow profits. You want a strong economy,” Ken Mahouni, CEO of Mahouni Asset Company told Yahoo Finance on Thursday. “Be careful with you.”

Despite the most honest tilt of the central bank, as more FOMC members predict interest rates either to stability or decrease by only 0.25 % instead of consensus 0.50 %, traders still play their expectations for the end of interest rates in the year.