Outlook Business Desk
The Federal Reserve held it benchmark interest rate steady on March 19 and indicated that it still anticipates 2 rate cuts this year, though it acknowleged a more uncertain economic outlook.
According to CNBC, the two rate cuts will help the S&P 500 (Standard and Poor's 500) to recover further from its late-February slump that briefly pushed it into correction territory. The Dow Jones Industrial Average jumped 1.4%, while the S&P 500 gained 1.7% and the Nasdaq Composite rose by over 2%.
According to quarterly economic projections, the Fed now anticipates slower economic growth this year and next than it did 3 months ago.
The Fed also projects that the unemployment rate will rise to 4.4% by the end of 2025.
Policy makers anticipate a slight increase in inflation this year, rising to 2.7% from the current 2.5%, both exceeding the Fed's 2% target.
The Federal Reserve stated in a release following the two-day meeting, "The level of uncertainty surrounding the economic outlook has grown."
The projections highlight the Fed's potential difficulty this year. Rising inflation would usually prompt it to maintain high interest rates or even increase them.
Weaker growth and rising unemployment would typically lead the Federal Reserve to lower rates to encourage borrowing, spending and economic expansion.