Fed Faces Inflation Risks and Trade Uncertainty as Rate Cuts Expected Later in 2025

The Federal Reserve is holding interest rates steady next week but remains cautious about inflation and economic slowdown linked to tariffs.

The Federal Reserve is expected to maintain its current interest rate range of 4.25%-4.50% during its upcoming policy meeting next week.
Economists predict two rate cuts in 2025, likely beginning in September, as the Fed evaluates inflation and economic growth data.
Rising inflation expectations, fueled by President Trump's tariff policies, are complicating the Fed's decision-making and raising concerns of stagflation.
U.S. consumer confidence has declined sharply, with inflation over the next five years projected at 3.9%, the highest in over three decades.
Stock markets have lost significant value, with the S&P 500 entering a correction, as trade tensions and tariff threats weigh on investor sentiment.