Washington: After three interest rate cuts in a row, the US Federal Reserve is expected signal it will remain on pause until the data changes, resisting pressure to continue cuts in the first rate decision since Donald Trump returned to the White House.
The second day of interest rate deliberations began at 9:00 am in Washington (1400 GMT) as scheduled, the Fed announced in a statement. The rate decision will be published at 2:00 pm local time.
Analysts expect the Fed to sit tight and wait to see how the economy evolves, and what impact Trump's tariff and immigration policies could have.
"I think the Fed sits on its hands," Moody's Analytics chief economist Mark Zandi told AFP.
"Until there's more clarity -- or any kind of clarity -- around the economic policies of the Trump administration, the Fed is going to be reluctant to move," he added.
The US central bank has a dual mandate from Congress to tackle both inflation and unemployment, primarily by raising or lowering its benchmark short-term lending rate, influencing borrowing costs for consumers and businesses.
The US economy is going fairly well with robust growth, a more-or-less healthy labor market, and relatively low inflation which nevertheless remains stuck above the Fed's long-term target of two percent.
The Fed's rate-setting Federal Open Market Committee (FOMC) voted to lower its key lending rate by a full percentage point between September and December 2024 to between 4.25 and 4.50 percent.
Futures traders overwhelmingly expect the Fed to remain on pause this month, and assign a probability of close to 70 percent that it will extend its hold at the next rate meeting in March, according to data from CME Group.
