Investing.com - The Federal Reserve chose to leave interest rates unchanged as expected at its latest policy meeting, noting that it will take a cautious approach to future decisions due to uncertainty around President Donald Trump’s tariff plans.
Here’s a look at how many Wall Street analysts are reacting to the decision:
"[Powell] largely downplayed concerns about inflation and rising inflation expectations, but was quick to say the Fed could either remain on hold or reduce rates" - Michael Gapen, Morgan Stanley (NYSE:MS)
"Although uncertainty was a key theme from the outset, we were surprised by his confidence given the unknowns at play. Although there are valid reasons to downplay recent jumps in the University of Michigan’s 5-10 year inflation expectations measure, we were surprised by his dismissal of this indicator, describing longer-term inflation expectations as well anchored." - Marc Giannoni, Barclays (LON:BARC)
"But Powell’s main message at this afternoon’s press conference was that the economic environment is highly uncertain, a message that is driven home by the fact that, since 2007, [rate-setting Federal Open Market Committee] participants have rarely had less confidence in their economic projections." - Ryan Swift, BCA Research
"Plain vanilla with a drop of dovishness [...] The FOMC statement was little changed in March. The committee removed its language around risks to the dual mandate being roughly balanced, and added in narrative on the increased uncertainty around the economic outlook. The FOMC leaned even further into stagflation than we projected." - BofA analysts
"If the economic slowdown that we forecast eventually leads the FOMC to place more weight on the ’full employment’ objective of its dual mandate than on its "price stability" objective, then we believe the Committee will ultimately conclude that lower rates are warranted and commence an easing cycle this summer." - Jay Bryson, Wells Fargo (NYSE:WFC)
"Our view remains that the Fed will be willing to look through the short-term impact of tariffs on prices, and would cut rates in response to signs of weakness in the labor market even if inflation remains around its current level." - Brian Rose, UBS