by James Rickards
Daily Reckoning
On Monday, we offered readers the following forecast of what would happen at the FOMC meeting this week:
On Wednesday, the Fed will continue its pause in interest rate cuts. That decision will leave the federal funds target unchanged at 4.50%. The Fed’s current rate lowering cycle began with a 0.50% rate cut on September 18, 2024, followed by additional rate cuts of 0.25% each on November 7 and December 18, 2024. The pause in cutting rates began at the Federal Reserve meeting on January 29, 2025. This pause is a reflection of the Fed’s concern about rising inflation and a desire to see additional data before deciding on its next move.
Here’s What Happened
The Fed did continue the pause in its cuts in the fed funds rate as we predicted. This kept the Fed’s target rate unchanged at 4.50%. The rate pause was widely expected. The Fed does not like to produce surprises if they can possibly avoid it. This is the no drama Fed.