--- title: The Fed Holds Steady but Signals Two Rate Cuts in 2025 slug: the-fed-holds-steady-but-signals-two-rate-cuts-in-2025 date: 2025-03-19 modified: 2026-08-14 author: Bhavishya Goyal excerpt: "" meta_description: The Fed holds rates steady but signals two cuts in 2025. Analyze market implications and automate your futures trading strategy with PickMyTrade. focus_keyword: "" canonical_url: "https://blog.pickmytrade.io/the-fed-holds-steady-but-signals-two-rate-cuts-in-2025/" og_title: The Fed Holds Steady but Signals Two Rate Cuts in 2025 og_description: The Fed holds rates steady but signals two cuts in 2025. Analyze market implications and automate your futures trading strategy with PickMyTrade. og_image: "https://blog.pickmytrade.io/wp-content/uploads/2025/03/image-5.jpg" schema_type: Article categories: - Economy tags: [] reading_time: 2 word_count: 394 robots: "index, follow" lang: en-US --- # The Fed Holds Steady but Signals Two Rate Cuts in 2025 At 2:00 AM Beijing time on Thursday, the Federal Open Market Committee (FOMC) of the Federal Reserve announced its latest interest rate decision, keeping the federal funds rate target range at **4.25%–4.5%**, in line with market expectations. Following the announcement, the three major U.S. stock indices surged in the short term, **spot gold prices rose**, and the **U.S. dollar index dropped nearly 20 points**. The FOMC statement revealed that the decision was passed with an **11-1 vote**, with Fed Governor **Christopher Waller** being the only dissenter. While Waller supported keeping the policy rate unchanged, he preferred **not to alter the pace of balance sheet reduction**. ### **Economic Outlook & Fed’s Dilemma** The statement also acknowledged **high uncertainty in the current economic environment**, removing previous language suggesting risks were “roughly balanced.” The Fed continues to face pressure due to **ongoing trade and tariff policies** under President Trump, which have fueled concerns over a potential economic slowdown and rising inflation. This combination creates a **policy dilemma** for the central bank, as it must balance inflation control with economic stability. Despite uncertainties, the Fed’s **dot plot** indicates expectations of **two rate cuts in 2025**. ### **Rate Cut Projections for 2025** Among the **19 Fed officials** surveyed: - **4** expect no rate cuts - **4** foresee one rate cut - **9** anticipate two rate cuts - **2** project three rate cuts ### **Revised Economic Forecasts** Fed officials have **downgraded economic growth projections** and adjusted inflation forecasts: - **GDP Growth (2024):** Revised **down to 1.7%** (previously 2.1%) - **Core PCE Inflation (2024):** Revised **up to 2.8%** (previously 2.5%) Long-term projections for **2026 and 2027** were also adjusted: - **GDP Growth (2026–2027):** **Lowered to 1.8%**, down from 2.0% (2026) and 1.9% (2027) - **Core PCE Inflation (2026–2027):** **Remains at 2.2% and 2.0%**, respectively ### **Balance Sheet Reduction to Slow** Starting **April 1**, the Fed will **slow the pace of balance sheet reduction**: - The monthly cap on **U.S. Treasury bond runoff** will decrease from **$25 billion to $5 billion**. - The cap on **mortgage-backed securities (MBS) runoff** will remain at **$35 billion per month**. ### **Conclusion** The Fed remains cautious amid economic uncertainties, balancing the risks of **inflation and slower growth**. While it held rates steady in this decision, the central bank signaled **two potential rate cuts in 2025**, reflecting concerns about economic headwinds. With **slower balance sheet reduction** and **adjusted growth expectations**, the Fed’s next steps will be closely watched by investors and economists alike. **Automate Your TradingView Strategies** Connect your alerts with [PickMyTrade](https://pickmytrade.io "PickMyTrade") — automated trade execution, no coding required. [Start free →](https://pickmytrade.io/pricing) For AI tools & developers:[View Markdown →](https://blog.pickmytrade.io/the-fed-holds-steady-but-signals-two-rate-cuts-in-2025.md)