New Delhi:
The US Central Bank of Federal Reserve did not make any changes to its benchmark interest rate on Wednesday 19 March. Interest rates will remain in the range of 4.25% to 4.5%. However, Fed has expressed the possibility of cutting the interest rate twice this year, but also said that uncertainty has increased about the economic situation.

According to Fed’s latest economic estimates, this year and next year US Economic growth (GDP Growth) is expected to be slower than earlier estimates. In addition, the unemployment rate can increase by 4.4%. At the same time, inflation rate can also increase to 2.7%, which is more than the target of 2% of the fed.

Us stock market rises, 500 points gained in Dow Jones

After the Fed’s decision, there was a tremendous jump in the US Stock Market. Dow Jones closed with a gain of 558 points (1.4%), while the S&P 500 index gained 1.7% and Nasdaq Composite increased by 2%.

Experts believe that the indication of continuing the interest rate cuts of Fed this year has increased the confidence of investors, which led to the strengthening of the market.

New tariffs can affect inflation: Fed Chair Powell

Fed Chairman Jerome Powell said that there is a continuous development in the US to reduce inflation, but it may delay due to the import duty. He also said that inflation is expected to be reduced by 2026 and 2027, but these estimates are not completely certain.

If inflation does not decrease, interest rates may remain high: Powell

Jerome Powell also made it clear that if the US economy remains strong and inflation does not move towards the target of 2%, the Federal Reserve can maintain high interest rates for a long time. However, if the labor market comes weak or inflation decreases faster than expected, then the fed can relax the policies and reduce the interest rate soon.

Positive signs for the market but uncertainty will remain

This decision of the Federal Reserve has been taken positively by the stock market, but there is uncertainty about inflation and economic growth. Investors will have to keep an eye on Fed’s policy and economic decisions even further.

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