Fed Expected To Keep Target Rate Unchanged Despite Inflation Concerns

2025-02-27 23:50:00 ET

Summary

• The Federal Reserve’s target rate remains in line with a neutral stance, based on TMC Research’s Fed funds model.
• For the past two weeks, the Fed funds rate has maintained a small spread over TMC Research’s model estimate of roughly 20 basis points or less – the smallest gap in more than a year.
• The low spread suggests that the Fed still has a basis for leaving interest rates unchanged at next month’s policy meeting.

By James Picerno

Inflation uncertainty has increased lately, but there’s still a case for expecting the Federal Reserve will keep its target rate steady at a 4.25%-4.50% range for the upcoming policy meeting on Mar. 19....

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