Federal Reserve Mouthpiece: The reason the Federal Reserve is holding steady is that there are risks associated with any measures taken
ChainCatcher news, referred to as the Federal Reserve's mouthpiece, Wall Street Journal reporter Nick Timiraos stated, "Currently, the Federal Reserve's goal in setting interest rates is not to help manage federal borrowing expenditures, but to maintain low and stable inflation in a strong labor market. The Federal Reserve is holding steady because it sees risks no matter what actions it takes. After four consecutive years of inflation above the target level, the inflation rate is close to the Federal Reserve's 2% target but has not fully reached it.If the Federal Reserve lowers rates too early, it may trigger inflation again. Many economists expect that due to rising import costs, businesses will raise prices, and lowering rates could stimulate more economic activity at the wrong time. The Federal Reserve does not want a situation where, a year later, the inflation rate jumps back above 3% and stays at that level.If the wait is too long, economic uncertainty combined with rising costs from tariffs could squeeze corporate profits, leading to layoffs and economic recession. The real estate market has recently slowed down, indicating that rising borrowing costs remain a significant obstacle in interest rate-sensitive sectors of the economy.The Federal Reserve has even more reasons to keep interest rates unchanged, as conflicts in the Middle East could reverse the recent decline in energy prices. This uncertainty alone strengthens the case for caution, as it adds one supply shock on top of another driven by tariffs."
