Fed keeps rates steady but emitted sharp warning about the economy
Federal Reserve kept its most important interest rate stable at 4.25-4.50%when it met Wednesday. Nevertheless, Fed Officers issued an unusually honest warning of what could be ahead.
“Uncertainty about the economic prospects has risen further,” said the bold officials. “The committee … assess that the risk of higher unemployment and higher inflation has increased.”
How the markets reacted
Gold traded sideways after Fed’s meeting, while shares traded lower. Gold has risen over 26% since the beginning of 2025, as world investors have stacked into Gulden’s safety.
The trend for gold points higher with larger banks projecting big gains for the noble metal. In a new research note today, Bank of America said it sees a growing potential for gold to hit $ 4,000 per day. Ounce in the second half of this year due to global trade -induced geopolitical uncertainty.
Quick Primer: How Fed Uses Interest Policy
One of the most important tools in Fed’s toolbox is Travel and Lowering its main interest rate.
- Lowering Interest rates help increase an economy that slows
- Travel Interest rates help shut down inflation
Fed’s dilemma Today, Fed says the US economy is staring at both Of the risks ahead – the potential of financial slowdown or even a recession, and the risk of consumer prices and inflation may rise from customs policy. The US economy is already declining as the growth of gross domestic product (GDP) in the first quarter (GDP) decreased by 0.3%.
What is the next? Equity investors are focusing on interest rates in the second half of 2025. In July, the CME FedWatch tool reveals that the market pricing in 55% odds on an interest rate 0.25%.
Still, the fat is stuck between a cliff and a hard place, as economists care about interest rate cuts can aggravate inflation.
Views from the street about finances and stocks
In a new Barron’s big money vote, Wall Street Money is seeing the risks of the stock market in the future.
- Fifty’s percentage says the stock market will suffer a decrease of 20% or more.
- Only 26% of the money managers are bullish in the stock market over the next 12 months.
- 24 percent say the biggest risk of stock market over the next 6 months is a financial downturn
- Nineteen percent say a recession is the biggest risk of market over the next 6 months
Wanna act after Fed’s warning?
Fed warns of major financial risks ahead. Money administrators warn of a bear market in shares this year. Is your portfolio located for what’s in front of? Central banks, pension funds, family offices and individual investors are aimed at the security of physical gold and silver. It is easy to buy more portfolio protection with an increased assignment for gold. Why not do it today?