MARCH 2025

THE DIRECTION OF INTEREST RATES ACCORDING TO THE FED

In March 2025, Federal Reserve Chair Jerome Powell addressed the direction of U.S. interest rates amid economic uncertainties stemming from recent policy changes. Speaking at the University of Chicago Booth School of Business, Powell emphasized a cautious and measured approach to monetary policy, indicating that the Federal Reserve is in "no hurry" to adjust interest rates.

Powell highlighted the need to differentiate between significant economic indicators and short-term fluctuations resulting from recent policy shifts in trade, immigration, fiscal matters, and regulation. He acknowledged survey data pointing to increased economic unease but noted that sentiment alone would not drive policy changes. The Federal Open Market Committee (FOMC) is expected to maintain the benchmark interest rate within the current 4.25% to 4.50% range at its upcoming March 18-19 meeting.

The U.S. economy added 151,000 jobs in February, slightly below expectations, with the unemployment rate edging up to 4.1%. Despite these figures, Powell emphasized that the economy "continues to be in a good place," with average monthly job gains of 191,000 since September.

In summary, Chair Powell signaled a "wait and see" approach to interest rate adjustments, underscoring the Federal Reserve's commitment to data-driven decisions amid evolving economic conditions.