Shocking Fed News: Rates Steady, Growth Down, Inflation Up! 😱💸

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Pray, Attend:

  • In a most predictable manner, the esteemed Federal Reserve has chosen to maintain its rates, whilst simultaneously slashing its growth expectations and elevating its inflation forecast. How delightfully contradictory! 😏
  • The central bank, in its infinite wisdom, has cited a most alarming increase in uncertainty regarding the economic landscape. One wonders if they consulted a crystal ball! 🔮
  • Moreover, the Fed has declared its intention to decelerate the pace of its balance sheet runoff—an endeavor they have dubbed “quantitative tightening”—commencing on the first of April. A most fitting day for such announcements! 🎭

As anticipated, the venerable U.S. Federal Reserve has opted to keep its benchmark fed funds rate steady at a rather unexciting range of 4.25%-4.50% this fine Wednesday, marking the second consecutive pause since a flurry of rate cuts concluded the year of our Lord, 2024.

However, the Fed’s quarterly economic projections have revealed a rather disheartening decline in expectations for economic growth, with the GDP increase for 2025 now languishing at a mere 1.7%, a far cry from the previously optimistic 2.1% forecasted in December. Alas, the outlooks for 2026 and 2027 have also been trimmed, as if they were mere hedges in a garden of despair.

“Uncertainty around the economic outlook has increased,” the Fed proclaimed in a statement that surely echoes the tumultuous tariff regime threatened by none other than President Trump. One can only imagine the dinner conversations at the Fed! 🍽️

In tandem with this slowing growth, core PCE inflation is now projected to reach 2.8% this year, up from a previous estimate of 2.5%. The core inflation outlooks for 2026 and 2027 remain steadfast at 2.2% and 2.0%, respectively. How reassuring! 🙄

The “dot plot,” which reveals the FOMC members’ predictions for the trajectory of interest rates, still anticipates the fed funds rate to conclude this year at 3.9%, unchanged from December’s forecast. The projections for 2026 and 2027 remain at 3.4% and 3.1%, respectively. A veritable game of musical chairs, is it not?

Furthermore, the Fed has announced its intention to slow the pace of securities runoff from its balance sheet—an endeavor they have dubbed “quantitative tightening”—beginning on the first of April. How delightfully ironic! 🎉

In the realm of cryptocurrencies, Bitcoin (BTC) exhibited a most volatile temperament in the moments following this announcement, but has since descended to $83,500, a slight dip from just above $84,000 prior to the news. Such drama! 🎢

Meanwhile, U.S. stocks continue to bask in solid gains, and the 10-year Treasury yield has dipped a mere two basis points to 4.28%. A most stable affair, indeed!

Risk assets have endured a rather tumultuous period in recent weeks, as mounting concerns over President Trump’s tariff threats and their perceived impact on inflation and economic growth have weighed heavily on investor sentiment. The Fed’s hawkish turn in December and January has also extinguished hopes for looser financial conditions in the near term, presenting formidable headwinds for both cryptocurrencies and stocks. How tragic! 😩

Lastly, Fed Chair Jerome Powell is scheduled to address the public at 2:30 p.m. Eastern Time (18:30 UTC), with traders eagerly awaiting his words for further insights into the policymakers’ outlook on monetary policy. One can only hope for a morsel of clarity amidst this delightful chaos!

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2025-03-19 21:21