Following its latest Federal Open Markets Committee (FOMC) meeting on March 19, the U.S. Federal Reserve kept its benchmark interest rate unchanged, while signaling confidence in the expansion of economic activity.

That leaves the Fed rate at 4.25% to 4.5%. The committee elected to hold the rate steady after enacting three cuts over the final four months of 2024.

source: tradingeconomics.com

Despite economic uncertainty impacts from the Trump administration’s tariffs policy, the Fed said they still see another half-percentage-point of rate cuts through 2025. The Fed’s “dot plot” of expectations shows that, overall, the forecast is for two rate cuts later this year.

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“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the Fed said in its FOMC update. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. Uncertainty around the economic outlook has increased. The Committee is attentive to the risks to both sides of its dual mandate.”

The Fed’s next FOMC meeting is set for May 6-7.