The Federal Reserve held interest rates steady Wednesday while slowing its balance sheet reduction.
Fed officials raised their year-end inflation forecast to 2.7% (up from December’s 2.5%), despite projecting slower economic growth, partly due to expected Trump administration tariffs.
Chair Powell cited “unusually elevated” uncertainty in current projections. The dollar has dropped about 6% against the euro since mid-January amid trade policy concerns, with markets likely remaining cautious until Q1 GDP data emerges.
Meanwhile, the Turkish lira hit record lows after authorities detained President Erdogan’s main political rival, while the yen strengthened following the Bank of Japan’s decision to maintain current rates.