The US Federal Reserve has lowered its economic growth forecast for the rest of the year citing uncertainty and potential risks with tariffs and tariffs-induced inflation. US economic growth for 2025 is projected at 1.4% with inflation at 3%. Economic growth is set to pick up next year according to the Fed’s projections at 1.6%.
The Fed’s previous forecast for economic growth released in March this year was at 1.7%
US Federal reserve Chairman Jerome Powell said during his press conference that the economy has reached maximum employment levels and unemployment is low, while inflation had gone down but is still higher than the Fed’s longer-term 2% target. Inflation has bumped upward mainly due to goods inflation. The prices for computers has also increased.
The Fed chairman reiterated that the mandate of the Fed is to prevent another bout of inflation with monetary policy while ensuring maximum employment.
The majority of Fed board members forecast interest rates to come down by 4% at the end of the year.
Interest rate rates have remained unchanged at their 4.5% level.
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