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US Fed rates remained unchanged amid warnings of risk to economy

ICICIdirect Research 09 May 2025 DISCLAIMER

US Federal Reserve rates remained unchanged as widely expected and was a non-event. According to Fed “If the large increases in tariffs are sustained, it is likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.

The Fed is not in a hurry to cut rates and signaled that it would wait for greater clarity before considering any adjustments.

We expect US Fed rates to remain unchanged in its June meeting as well considering the recent batch of economic data paints mixed picture and they will wait for tariff uncertainty to clear.  We expect Fed won’t act prematurely and they will decide on action after accessing the impact of US tariff, immigration and tax policies before making any bold decisions.

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