With all eyes on the US economy and the ongoing inflation fight, the US Federal Reserve has opted to leave interest rates unchanged for March 2025. Indeed, the decision was expected, with more than 99% of economists projecting a 99% chance the Central Bank left rates unchanged.

The decision comes as the United States faces increased recession fears amid ongoing geopolitical tensions. Since his inauguration in January, US President Donald Trump has sought to balance trade through aggressive economic policy. However, that has led to a budding trade war on a global scale. Now, all eyes are on how that could affect the Fed moving forward.

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Federal Reserve Leaves Rates Unchanged as US Economy Faces Recession Risk

In early February, Federal Reserve Chairman Jerome Powell said there was no need to rush cutting interest rates. Indeed, he spoke of the need to be cautious. Specifically, he spoke of the bank’s policy stance being “significantly less restrictive than it had been,” in recent years.

That perspective has undoubtedly informed the most recent decision from the bank. With recessionary fears abounding, the Federal Reserve has opted to leave interest rates unchanged in March 2025. Specifically, the Central Bank’s policy rate does now remain in the 4.25–4.50% range.

Federal Reserve Chair Jerome Powell
Source: Brookings Institute

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Powell and the Fed are now in an interesting position. Things have changed drastically under the incoming Trump administration, especially amid a flurry of policy changes and executive orders. Therefore, many economists expected the bank to observe new data and projections that could give more insight into how the nation will respond.

That doesn’t quell fears that many have, however. With the increased aggression in Trump’s policies come increased risks. The president has manifested a trade war with Canada and implemented tariffs on both neighboring North American nations. Wednesday should see Powell address the media, and speak to the direction that the Fed will go in the near term as more data comes to light.

  • Interest Rates
  • US Federal Reserve