Us fed meeting: It was decided not to make any changes in the interest rates in the meeting of the Federal Reserve in the US on Wednesday, January 29, 2025. After this decision, interest rates will remain within the range of 4.25% to 4.5%. This decision remained according to market estimates. This decision of the US Fed may also affect the Indian stock market, where a slight decline in early trade and pressure on the rupee can be seen.
Earlier, fed rates were cut in 3 consecutive meetings, but this time the central bank decided to keep the rates stable. The US stock market saw a decline after this announcement. Nasdaq recorded more than half per cent and S&P 500 declined by about half per cent. Dow Jones also closed down. Significantly, the meeting was held the first meeting after taking over the post of Donald Trump, the new US President.
Federal Reserve Chairman Jerome Powell on Wednesday clarified that the US central bank would not make any changes in interest rates in the near future. He indicated that the fed will maintain the rates at the current level and there is no intention to reduce them soon. The main reason for this decision is uncertainty about President Trump’s policies. These policies include important issues like immigration, tariffs, fiscal policy and regulation (regulations), which can have a major impact on the economy.
Fed Chairman Jerome Pavel said, “We are currently in a position of weight and watch. We must first see what policies the Trump administration applies. When these policies are clear, only then we will be able to properly assess their economic influence. ”
After the decision of the US FED, the treasury yield bounce, then fall; Stock market weak
The Treasury Yield witnessed a boom following a decision of stability at the US Federal Reserve rates, but the Yield fell back during the press conference of Chairman Jerome Powell. The S&P 500 index of the US stock market was also weakened after this decision.
This decision of Fed may further increase tension with former President Donald Trump, as the trump continued to pressurize the Fed to cut interest rates. Recently, Trump had said that he has more understanding about interest rates than Jerome Powell. He wrote on the social media platform Truth Social, “Jerome Powell and Fed showed a failure to stop the problem he himself made with inflation.” When the Federal Reserve spokesperson was sought a response on this statement, he refused to comment.
What will be the effect in the Indian stock market?
The impact of stability in Fed’s interest rates can also be seen on the Indian stock market. Increased demand for dollars can cause pressure on the rupee, which can weaken the rupee. In addition, foreign investors can limit capital flows from the Indian market by taking alert stance, which can lead to light fluctuations in the market. In the early Thursday session, there is a possibility of slight decline in Indian markets, as the effect of weakness in American markets may also be seen here.
Amidst market fluctuations, investors should be cautious in the current situation and focus on long-term strategy. Understanding global signals, changing your portfolio can be correct.