United States Fed enters policy purgatory

The United States has the possibility of rate cuts being front-loaded due to the length of time it takes for tariffs, tax cuts and curbs to immigration to work their way through the economy, writes KPMG US Chief Economist Diane Swonk.

The Federal Open Market Committee (FOMC) – the policy setting arm of the Federal Reserve – voted unanimously to keep the target rate at 4.25 percent - 4.5 percent, the same as in December. The statement following the meeting was more hawkish than the previous statement, categorising the labour market as solid and removing the line on inflation progress. Chairman Jay Powell tempered that sentiment in his statement and comments at the press conference that followed. The Federal R...

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Authors: Diane Swonk

Published Date: 30 January 2025