Fed meeting live updates: Fed keeps rates steady, continues to see two rate cuts in 2025

Fed Chair Jerome Powell revealed how he thinks about tariffs: “They tend to bring growth down; they tend to bring inflation up.” He also suggested that Trump’s latest tariffs already appear to be driving some price increases: “We now have inflation coming in from an exogenous source,” Powell said. 

Yet, he doesn’t currently think this economic environment — which economists often call “stagflation” — could be nearly as bad as what happened during the ‘70s and ‘80s. Back then, prices soared almost twice as much as they did in the post-pandemic era, and officials had to hike interest rates to the highest levels on record, which pushed the economy into a recession. 

“I wouldn’t say we’re in a situation that’s remotely comparable to that,” Powell says. “Inflation is still running in the 2s with probably a little bit of a pick up associated with tariffs.”

5 credit card moves when you see economic red flags — before a full-blown alarm

As a former banker, recent data makes me a little nervous for credit card users carrying balances. Since Q2 of 2023, the New York Fed has consistently reported rising credit card delinquency rates. The latest data, from the final quarter of 2024, shows 11.4 percent of credit card balances are delinquent by 90 days or more. Just two years ago, in 2022, seriously delinquent balances were 4 percent lower. 

It’s a 13-year peak with the closest instance being a pandemic-related spike of 10 percent. Banks are already on edge since these delinquency rates are preceded by record high credit card balances, topping $1.21 trillion. Banks lose money if people can’t pay their credit card bills, so high delinquencies are a major red flag for them. 

I saw first-hand how elevated delinquencies impacted credit issuer decisions during COVID — especially when paired with other economic red flags. When banks get spooked, consumers often pay the price in the form of tightened credit standards, higher interest rates or sparse promotional APR offers. 

If your credit card balances are high, don’t wait for the Fed to lower rates to take action. I’ve taken proactive steps with my credit cards to protect myself in the face of economic uncertainty. You can, too: 

1. Crunch the numbers and try to increase your monthly payment toward your debt. 
2. Apply for the balance transfer card before you think you need one. Don’t wait until your card is maxed out or your credit score drops. Keep in mind any time limits to take advantage of the offer.
3. Consolidate high-interest debt with a personal loan. 
4. Avoid adding to your balance by saving for emergencies. 
5. Look into a debt management plan through a non-profit credit counseling organization. 

Concerning circumstances aside, these aren’t bad moves to make with your credit cards anyway. If your finances improve, you’re in a better position should economic red flags become alarms. Should those red flags cease waving, you’ve laid the groundwork for financial success.

No alarm bells yet?

Federal Reserve Chairman Jerome Powell indicates, in response to a reporter’s question, that he’s not highly concerned about recession risks, at least for the moment. He noted that typically, recession risks for the coming 12 months run at about 25%. He acknowledged that some private forecasters have raised the risk of a downturn in their own outlooks. Powell said the risk has risen somewhat, but remains relatively low overall.

Senior Industry Analyst Ted Rossman discusses the U.S. economy and consumer sentiment

Rossman joins CNBC’s The Exchange

The economy is better than people realize despite low sentiment, Rossman says.

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“A good part of it is coming from tariffs,” he said at his post-meeting press conference. But one reason why those inflation projections didn’t rise even more, he says, is because officials saw “weaker growth” as “offsetting” some of it. 

Higher import taxes are considered to be a drag on economic growth because they can disrupt supply chains and harm business’ production capacity. Weaker hiring and profits could also slow the economy, which itself is actually *deflationary.*  

Still, “with the arrival of tariffs, there may be a delay in further progress over the course of this year,” Powell says, referring to getting inflation back to 2 percent.

The stock market – often fickle after a Fed announcement – is holding its gains, at least for now

• After a Fed announcement, it’s not unusual for stocks to do a headfake and maybe even a double headfake in the 30 minutes or so after the announcement.
• This time we’re seeing the market hold on to its earlier gains, at least in the immediate aftermath of the decision to leave rates as they are.
• The market may be taking heart that the Fed still foresees two rate cuts this year, leaving the potential for monetary stimulus in the months to come. 

Here’s who wins and who loses from the latest Fed move.

Here are the most important changes in the Fed’s new Summary of Economic Projections:

• On rates: The median estimate for interest rates remained the same, but that’s masking some material changes in how many rate cuts officials now expect to make this year. Nine officials see two rate cuts in 2025 (down from 10 officials in December), two officials see three rate cuts (down from three officials in December), while no policymaker sees four or five cuts (two projected more than three cuts in December). On the other hand, four officials see one cut, and another four officials see no cuts.
• On inflation and the job market: A touch of stagflation here, but a very mild case. The median estimate of the unemployment rate moved up to 4.4 percent from 4.3 percent, while inflation edged up to 2.7 percent from 2.5 percent. 
• On economic growth: This was the kicker. Policymakers now expect the U.S. economy to grow 1.7 percent in 2025. That’s still solid, but not as robust as the 2.1 percent median estimate in December. 

The Federal Reserve left interest rates unchanged at its March meeting, choosing to take a careful approach with how it steers the U.S. economy over growing worries that President Donald Trump’s policies could push up both inflation and unemployment.

Some highlights:

• The Federal Open Market Committee (FOMC) will keep its benchmark federal funds rate at 4.25-4.5 percent, a target range last seen in early 2023. Before then, rates hadn’t been this high since 2007. 
• In their post-meeting statement, officials continued to say that the economy has expanded and the labor market appears “solid,” but notes in a new phrase that “uncertainty around the economic outlook has increased.” Officials say they are “attentive to both sides of its dual mandate.” 

Here’s what it means for you: If you’re thinking about financing a big-ticket purchase or renovating your home, the Fed’s latest move means that borrowing costs on products such as credit cards, auto loans, home equity lines of credit (HELOCs), adjustable-rate mortgages and more will stay high. If you have some cash in a high-yield savings account, though, you’ll continue to be rewarded with the best returns in over a decade.

Bottom line: Uncertainty over Trump’s policies isn’t just rattling financial markets, businesses and consumers. It’s also impacting the U.S. central bank. With fears rising of an economic slowdown, the risk is that the next time the Fed cuts interest rates, it might be for more “bad” reasons than “good.” Continue paying down high-interest credit card debt and building up your emergency fund.

Here’s what the Fed announced at its March meeting

Uncertainty over President Donald Trump’s policies — and whether higher tariffs might push up both inflation and unemployment — is keeping the Fed on the sidelines, at least for now.

Read more

Whether the Fed raises, lowers or maintains its benchmark fed funds rate, savers can still benefit in today’s high-rate environment

Regardless of the Fed’s future interest rate moves, today is still a good time to take advantage of high annual percentage yields (APYs) on deposit accounts, be it certificates of deposit (CD), savings accounts or money market accounts. This is especially true for savers who are considering locking their stash of cash in a fixed-rate CD. 

If you open a CD today that’s yielding 4.4 percent APY, you’re guaranteed that your money will earn interest at that rate for the next 12 months, even if the Fed decides to lower rates later this year.

Need proof in numbers? My colleague, Karen Bennett breaks down the scenario of how much you can earn in interest with $10,000 saved in a one-year CD in her article: Here’s how much investing $10,000 in a CD right now could earn you in 1 year.

HELOCs are heating up. For almost three years now, the balances on home equity lines of credit have increased as more homeowners opt to tap near-record amounts of equity: an average $311,000 as of the third quarter of 2024, according to CoreLogic.

That’s all been helped by the Federal Reserve, which began lowering benchmark interest rates last fall. That made HELOCs — which have variable rates — more affordable.

There could be more declines in store, too, if the Fed issues another cut sometime this year. Here’s more on the growing HELOC trend.

Top-yielding accounts remain competitive

Since the last Federal Reserve rate decision meeting on Jan. 29, here’s how the top annual percentage yields (APYs) have changed on savings accounts and certificates of deposit (CDs) monitored by Bankrate:

• The leading high-yield savings account rate has decreased slightly to 4.50 percent APY from 4.55 percent APY. 
• The highest five-year CD rate has remained the same at 4.25 percent APY.
• Likewise, the top one-year CD rate has held steady at 4.40 percent APY.

Some of the recent stability in competitive CD APYs could be the result of the Fed holding its benchmark rate steady in January. APYs on high-yielding deposit accounts tend to move in lockstep with changes to the federal funds rate.

Outside the current rate cycle, APYs offered on many deposit accounts are at their highest levels in more than a decade. It remains to be a great time for savers, thanks to deposit account rates above the annual inflation rate, which is currently at 2.8 percent.

• Stocks were up in early trading as investors look for clarity around the Fed’s expectations for inflation in the year or two ahead.
• In recent weeks the market has been up early, only to reverse direction and end up solidly in negative territory as bearish sentiment rules the market for now. 
• Investors also have soured on AI stocks, and these megacap stocks have led the market lower with the Magnificent 7 stocks all down for the year.  

Meantime, the S&P 500 and Nasdaq have hit “correction” territory – here’s what that means for investors.

The Federal Reserve cut the federal funds rate aggressively in late 2024. Mortgage rates responded by going…straight up.

I recently wrote about this disconnect, which suggests that if the central bank simply cuts rates one time this year — as many observers expect — there will be no significant effect on mortgage costs.

Remember, though, that the Fed doesn’t directly set mortgage rates. Instead, they’re usually benchmarked off 10-year Treasury yields, which are dictated by the sentiment of the investors who buy mortgages after they’re packaged up as securities.

On a hopeful note for homebuyers: Mortgage rates have declined in the last few weeks, after holding steady above 7 percent at the start of 2025.

However, it’s still at an elevated level and therefore little consolation for debtors

Let’s start with the good news: The average credit card rate has fallen to its lowest level in two years. The bad news? It’s still quite high (20.09 percent).

Last August, we measured the highest average credit card rate (20.79 percent) since we started tracking it 40 years ago. The average hasn’t fallen below 20 percent since early March 2023. While there’s a good chance that credit card rates will nudge a bit lower in the coming months, it’s unlikely the average will fall below 19 percent this year.

The average credit card balance is $6,580, according to TransUnion. If you make minimum payments at 20.09 percent, you’ll be in debt for 220 months (more than 18 years) and you’ll end up paying $9,590 in interest. Even if that rate falls a full percentage point — probably a stretch for this year — the minimum payment math is still ugly (218 months and $9,079 in interest).

If you have credit card debt, as about half of cardholders do, don’t wait for potential Fed rate cuts to bail you out. Take matters into your own hands to pay down your debt as quickly and cost-effectively as possible. Consider signing up for a credit card with a generous 0 percent balance transfer promotion, working with a reputable nonprofit credit counseling agency such as Money Management International or taking on a side hustle to earn more money to put toward debt payoff.

Credit card rates are high and they’re going to stay high for the foreseeable future. This is most households’ highest-cost debt by a wide margin, so paying it down should be a priority.

McBride: The Fed is ‘in a bit of a no-man’s-land right now’

Federal Reserve meets this week amid economic uncertainty

The Fed looks likely to keep interest rate cuts on hold.

Watch the interview

Markets will be listening to how the Fed is thinking about tariffs and inflation

When Fed Chair Jerome Powell speaks following the central bank’s latest interest rate announcement Wednesday, investors will be listening closely for clues about how the Fed thinks tariffs and other policies may impact inflation and the economy.

Here’s what to watch for:

• Traders are expecting two interest rate cuts in 2025, but the rationale for those cuts is something to pay attention to.
• Investors would likely view interest rate cuts positively if the reason for those cuts is that inflation continues to fall closer to the Fed’s long-term target of 2 percent. But new tariffs present a risk that inflation could spike and the Fed may have to hold rates higher for longer.
• Any sign that the Fed is cutting rates due to a deteriorating economic growth outlook could spook investors and cause stocks to sell off.

Here’s some important advice to remember

When markets are in the red and the news cycle is volatile, it’s probably easier to feel stressed than level-headed. I recently caught up with a few financial planners on what Americans should (and should not) do about it. 

Here’s what they recommend: 

• Save for the future, and resist the urge to panic buy: Before making a big-ticket purchase, ask yourself: Was this an item I was planning to buy, with or without tariffs? If the answer is yes and you’ve already budgeted for it, Bankrate senior economic analyst Mark Hamrick gives you permission to think about buying it now. If the answer is no, he says you might be better off saving more for the future. He reminds us that just 43% of Americans say they would pay an unexpected $1,000 expense with their savings, underscoring the importance of saving any little bit you can.   
• Find the right places to park your cash: Periods of higher inflation make it an important time to ensure you’re earning a decent return on your cash, says Morningstar’s Christine Benz. Historically, investing in financial markets is the best way to beat inflation, even when factoring in volatility, she says. High-yield savings accounts are also offering consumers the highest yields in over a decade,
• Selling is the only way to lock in a loss: Dave Zavarelli, CFP, says downdrafts in the market are a perfectly good time to revisit your asset allocation — especially with an expert. Yet, letting emotions and fear drive your portfolio can often lead to significant opportunity costs, he says. 

“I’m generally a believer of ‘setting it and forgetting it’ when it comes to long-term investing,” Zavarelli says. 

Trump’s tariffs could push up prices and weigh on growth

It’s safe to say that investors haven’t been taking President Donald Trump’s stop-and-go tariff policies well. The S&P 500 has dropped more than 8 percent from its all-time high on Feb. 19, dangerously close to what financial analysts typically call a “correction.” Meanwhile, the latest model predicting U.S. economic growth for the first quarter of 2025 suggests that the financial system may actually contract by 1.8 percent, according to the Atlanta Fed. 

The nation’s big banks have upgraded their recession forecasts, citing policy uncertainties. J.P. Morgan Chase increased its recession odds for this year to 40%, Moody’s Mark Zandi put the odds at 35% and Goldman Sachs is pegging the odds of a downturn at 20%. 

But does all of that mean the U.S. economy is heading for a recession? Many of the economists I talk to say it’s too soon to know. Before tariffs were thrown into the mix, the fundamentals of the economy looked pretty good. 

“We’re far from a contraction becoming a reality,” says Kristina Hooper, chief global market strategist at Invesco. “A recession can still be prevented by abandoning policies that are negative for the economy.” 

Sometimes, though, it’s uncertainty that can be most damaging to an economy that’s already been losing some steam as the Fed keeps interest rates high. Mike Skordeles, head of U.S. economics at Truist, tells me that he’s been hearing from business contacts that they’re hesitant to make new investments or hire more workers right now.

“Businesses say, ‘I might as well sit and wait,’ Sitting and waiting is not pro-growth,” he says.

Here’s what to watch at one of the most complicated Fed meetings in months

Life’s what happens when you’re busy making other plans. That might as well be Fed Chair Jerome Powell’s slogan for the Fed’s March interest rate decision, expected today at 2 p.m. ET. 

At their most recent meeting in January, policymakers were so close to the elusive “soft landing” of the U.S. economy — Fed code for cooling inflation without pushing the economy into a recession. Inflation was still high but had massively improved. Joblessness had risen only modestly. Most important to economic growth, consumers kept spending. Fed officials said the U.S. economy was in a good place, which was allowing them to proceed patiently with future rate cuts. 

Then came an abundance of downside risks, largely from policy uncertainties surrounding President Donald Trump’s new administration. The chief executive has threatened, imposed, then later removed several batches of tariffs on some of the U.S.’s largest trading partners. He’s also cracked down on immigration and moved to curtail federal spending by laying off workers at government agencies. 

The Fed is widely expected to leave interest rates alone today. Yet, if you’re tuning in to today’s decision, you’ll probably want to pay close attention to whether the Federal Open Market Committee (FOMC) still says the economy is in a “solid” place. And you’ll want to remember a very important lesson when it comes to personal finance: Tune out the noise, and stay focused on the big picture. 

Here’s what’s most important to watch:

• Will Fed officials signal higher unemployment and inflation in the year ahead? Economists say tariffs could push prices higher while also weighing on business investment, profitability and growth. If policymakers expect unemployment to increase, economic growth to slow and inflation to simultaneously rise, you might start to hear a dirty word tossed around: “stagflation.” 
• Speaking of stagflation, what will Chair Powell say about it? The last time Powell was asked about stagflation concerns in May 2024, he lightened the mood with a quip: “I don’t see the ‘stag nor the ‘flation.” But that was before Trump’s trade war heated up.
• Will the Fed pencil in any more rate cuts? If inflation rises but so does unemployment, the next big question is what the Fed will prioritize. Thankfully, the Fed is set to update its Summary of Economic Projections, which can give you some pretty good clues. In its last estimates from December, the Fed signaled that it planned to cut interest rates just twice in 2025. More cuts could signal growth fears, while fewer cuts could suggest inflation concerns. 

To learn how the Fed might respond to those conflicting concerns, I recently caught up with Erica Groshen, the former commissioner of the Bureau of Labor Statistics and vice president of research at the Federal Reserve Bank of New York. Here’s what she had to say: “Without the inflationary pressures, the Fed would probably act very quickly to reduce rates. With the inflationary pressures, they would probably wait a little bit longer” to cut, she said.

See more of her insights, and read more about what to expect at the Fed’s latest meeting, in my full preview: What to watch at the Fed’s March meeting.