Mar 24, 11:45 AM

Federal Reserve Holds Rates at 4.25%-4.50% Post-Trump Return, Eyes 50 bps Cut Amid Brazil's Economic Shifts

The Federal Reserve has decided to maintain interest rates within the range of 4.25%-4.50%, two months after Donald Trump's return to the White House. This decision comes amidst revised economic projections that indicate slower growth, higher inflation, and rising unemployment in the U.S. The Fed's outlook suggests a potential 50 bps rate cut in 2025, influenced by trade tariffs and economic policy changes under the new administration. The latest economic projections from the Fed show a growth rate of 1.7% for the year, down by four tenths from previous estimates. Unemployment is expected to rise slightly from 4.3% to 4.4%, while inflation is projected to increase from 2.5% to 2.7%. These projections reflect increased uncertainty due to trade tariffs and economic policy changes under the new administration, with markets reacting and the S&P index showing movements. In Brazil, financial markets are closely monitoring the Central Bank's Focus report, which shows a reduction in inflation expectations for 2025. The projected IPCA for this year has fallen to 5.65% from 5.66%, while the GDP growth forecast has been adjusted to 1.98% from 1.99%. The Selic rate is expected to remain at 15% by the end of 2025, following the recent decision by the Copom to raise it to 14.25%. For 2026, the IPCA is projected at 4.50%, and the GDP growth at 1.60%. The dollar is expected to be at R$ 5.95 by the end of 2025 and R$ 6.00 in 2026. Meanwhile, the central bank of China is set to further erode the role of its medium-term lending facility rate.

#Federal Reserve #Donald Trump #White House #Fed #Brazil #Central Bank #Focus #Selic #Copom #China

Written with ChatGPT .

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