Summary
- The Fed reported that it has revised down the US GDP growth rate forecast from 2.1% to 1.7%, indicating a slowdown in economic growth.
- The Personal Consumption Expenditures price index growth rate has been raised from 2.5% to 2.7%, suggesting that inflationary pressure is expected to increase.
- The Fed stated that it will hold the base interest rate at the current level of 4.2~4.5% and respond cautiously depending on the economic situation.
GDP Growth Rate Forecast Lowered from 2.1% to 1.7%
Inflation Rate Expectation Raised from 2.5% to 2.7%
Base Interest Rate Held at 4.25~4.5%
The Federal Reserve (Fed) of the United States lowered the economic growth rate forecast for the US while raising the inflation expectation at the March Federal Open Market Committee (FOMC) meeting held on the 19th (local time). Maintaining a 'cautious stance' due to economic uncertainties such as tariff policies, the base interest rate was held at 4.2~4.5%.
In the Summary of Economic Projections (SEP) released by FOMC members, the US Gross Domestic Product (GDP) growth rate forecast was revised down from 2.1% to 1.7%. The Personal Consumption Expenditures (PCE) price index growth rate forecast was raised from 2.5% to 2.7%. This reflects the expectation that President Donald Trump's tariff policies will slow economic growth and exert upward pressure on prices.
In the dot plot of base interest rate forecasts, the median forecast for the base interest rate at the end of 2025 was maintained at 3.9%.
Fed Chairman Jerome Powell stated at a press conference held immediately after the FOMC, "There is no need to rush additional (rate) adjustments," and "We will respond cautiously until clearer economic signals appear."
New York = Correspondent Park Shin-young nyusos@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
