The Federal Reserve on Wednesday announced that it will leave its benchmark interest rate unchanged as policymakers continue to assess uncertainty around inflation and economic conditions in light of federal policy shifts.
The central bank’s decision leaves the benchmark federal funds rate at a range of 4.25% to 4.5%.
The move comes after the Fed left rates at that level at its previous meeting in January, which came on the heels of three consecutive rate cuts at its preceding meetings – which involved a 50-basis-point cut in September and a pair of 25-basis-point reductions in November and December.
The Federal Open Market Committee (FOMC), which guides the central bank’s monetary policy moves, noted in its announcement that, “Uncertainty around the economic outlook has increased” and added it’s focused on risks to both sides of its dual mandate to promote maximum employment and keep inflation at 2% over the long-run.
In addition to announcing its decision on interest rates, the FOMC released a summary of economic projections that showed central bank policymakers are forecasting two 25-basis-point interest rate cuts this year, followed by two cuts of that size in 2026 and one in 2027.
Policymakers projected slower economic growth and higher unemployment in 2025 than in their last projections released in December.
They see real gross domestic product (GDP) growing 1.7% as of the end of 2025, down from a 2.1% estimate, while the unemployment rate was projected to be 4.4% in December – up from 4.3% in the last projections. The unemployment rate was 4.1% in February.
The Fed’s economic projections also show the personal consumption expenditures (PCE) index, policymakers’ preferred inflation gauge, at 2.7% at the end of this year – higher than the 2.5% estimate released at the end of last year. That’s slightly above the 2.5% PCE reading the Commerce Department reported for February.
This is a developing story. Please check back for updates.
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