The Fed report

highlights from The FOMC Policy Update
march 20, 2025

Yesterday, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its March meeting.

FOMC Policy Updates: Key Highlights

  • The FOMC maintained the target range for the federal funds rate at 4.25-4.50% in a unanimous decision at its second meeting of 2025.
  • There was no change to the dot plot of rate projections from the December meeting, which continues to show two quarter-point cuts this year.
  • The FOMC reduced the pace of runoff of its Treasury holdings from $25 billion per month to $5 billion per month beginning in April while maintaining Agency debt and Agency MBS runoff at a pace of up to $35 billion per month.

notable commentary

  • Although the Fed’s new economic projections illustrated both a modest increase in expected inflation for 2025 (2.7% vs. 2.5% in January) and reduced GDP growth (1.7% vs. 2.1% in December), longer term projections for both metrics remained relatively static, with Chair Powell noting that long-term inflation expectations remain well-anchored.
  • The Fed’s policy statement noted that “[u]ncertainty around the economic outlook has increased” and deleted language from the January statement that the risks to its dual mandate of low inflation and maximum employment are “roughly in balance.”
  • Chair Powell noted that the impact of tariffs would likely be ”transitory” but also that it was too early to tell the ultimate impact of the new administration’s current focus on trade, immigration, fiscal policy, and regulation.
  • Against this more uncertain outlook, Chair Powell reiterated that monetary policy was well-positioned and that the Fed would continue to monitor incoming data in real time for future monetary policy decisions.

Important Disclosures
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