US Federal Reserve Meeting: The Federal Open Market Committee (FOMC) will meet on March 18 and 19 for its second monetary policy meeting of 2025. Amid increased market volatility caused by US President Donald Trump's newly implemented tariff policies, investors are closely watching the Federal Reserve's decision on benchmark interest rates.
The Fed's upcoming rate announcement is anticipated to keep short-term interest rates unchanged at 4.25 per cent to 4.50 per cent, with minimal chances of a rate reduction. These rates have held steady since December 2024, when policymakers forecasted two quarter-point cuts for 2025.
Since the last policy meeting, concerns have built up about stagflation risks in the US economy in response to the Trump administration’s policy framework that could get reflected in the projections.
The FOMC conducts eight scheduled meetings each year, with additional sessions as necessary. The upcoming two-day meeting is set for March 18 and 19, with the key interest rate announcement expected on March 19 at 2 p.m. ET (March 20, 12:30 a.m. IST). The committee will also release its economic projections alongside the decision.
After the meeting concludes, US Federal Reserve Chair Jerome Powell will hold a press conference on March 19 at 2:30 p.m. ET (March 20, 1 a.m. IST) to discuss the policy outlook and answer questions from the media.
The Federal Reserve will livestream the press conference on its official channels, enabling the public and investors to watch in real time. You can watch the meeting on below links -
Federal Reserve YouTube channel: https://www.youtube.com/federalreserve Federal Reserve X (formerly Twitter) handle: https://x.com/federalreserve Federal Reserve official website: https://www.federalreserve.gov/live-broadcast.htm
One of the most anticipated elements of the meeting will be Powell's insights regarding essential economic metrics, such as inflation, employment, and overall economic health. Given the uncertainty introduced by Trump's tariff policies, investors will be eager to grasp the Federal Reserve's perspective on both the immediate and long-term effects of these trade strategies.
“Our base-case view of a 50bps cut over 2025 possibly 25bps in September and 25bps in December 2025 remains in place followed by a further 50bps cut in 2026. The risk remains of the FOMC back-loading its rate cut plans for 2025 to 2026. However, our projections will likely continue to deviate based on the manner in which the policy framework evolves and cuts can be frontloaded in case economy starts to deteriorate,” ICICI Bank Global Markets said in a note.
The FOMC Chair is unlikely to provide guidance in terms of the policy rate outlook. He could warn about ‘inflation risks’ and ‘slowing growth’ momentum that could be in store, it added.
“Given that the FOMC could remain non-committal in terms of the policy rate guidance, the net impact on the market could remain limited. Instead, focus will be on Trump’s policy regime that has resulted in a fading of US exceptionalism. The net result could be a softer bias for yields and the global USD coming under pressure,” the brokerage firm said.
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