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Fed Update: Uncertainty stalls rate action
The Fed maintains a wait-and-see approach as it sees heightened risks
By Metrobank Research
Amid heightened uncertainty, the US Federal Reserve (Fed) maintained the Federal Funds Target Rate (FFR) at 4.25%-4.50% at the Federal Open Market Committee (FOMC) meeting on May 6-7.
In its recent official statement, the FOMC recognized increased risks of higher unemployment and higher inflation. However, in line with previous statements, Fed Chair Jerome Powell maintained that the committee will remain data-driven, highlighting that while risks have risen, these have yet to materialize.
Metrobank forecasts that the Fed will reduce its key rate by a total of 50 basis points (bps) this year, which will bring the target FFR down to 3.75%-4.00%.
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)
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Policy rate views: Uncertainty stalls cuts
US Federal Reserve keeps policy rate steady for a third time
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