Federal Reserve Holds Interest Rates Steady in First 2025 Decision
The Federal Reserve kept its benchmark interest rate unchanged on Wednesday, Jan. 29, marking the first rate decision of 2025 and the first under the new Trump administration.
The Federal Reserve has paused interest rates cuts, and kept interest rates the same
1/29/2025
AD_SHOULD_BE_HERE
The decision leaves the federal funds rate at 4.25% to 4.5%, following a period of higher rates in 2023 and 2024, when the Fed aimed to curb post-pandemic inflation. Markets widely expected the pause.
Rate Cut Expectations
Probability markets suggest the Fed won’t cut rates until June, with a potential second cut later in the year. The Fed’s December projections indicated two rate cuts in 2025.
Why Did the Fed Pause Rate Cuts?
The Fed operates under a dual mandate: ensuring price stability while supporting full employment. Currently, inflation is rising, while the job market remains strong.
AD_SHOULD_BE_HERE
- December’s jobs report showed 256,000 new jobs, far exceeding forecasts by 100,000.
- The unemployment rate dipped to 4.1%, down from 4.2% in November.
The Fed first cut rates in September 2024 due to labor market concerns, making a 50-basis-point reduction, followed by two smaller 25-basis-point cuts to end the year.
However, inflation remains a challenge:
- Consumer prices rose 2.9% in 2024.
- December saw a 0.4% monthly increase, the highest since February 2024.
- November inflation rose 0.3% monthly and 2.7% annually.
- This marks the third consecutive monthly increase, with inflation now at its highest level since July 2024, according to Bureau of Labor Statistics data.
Trump Pressures Fed for Lower Rates
This rate decision is the first since Donald Trump took office on Jan. 20. During his first presidency, Trump was highly critical of Fed Chair Jerome Powell, though he has stated he will not remove Powell before his term ends in 2026.
AD_SHOULD_BE_HERE
Despite pressure for lower rates, the Fed appears to be taking a cautious approach, balancing inflation concerns with economic stability.
Trump: I want no more property taxes across the United States
7/4/2025 10:14 PMTrump's "Big, Beautiful" has $1.1 trillion in health cuts and 11.8 million losing care
7/3/2025 7:31 PMTrump’s Big, Beautiful bill passes the House
7/3/2025 7:27 PMGas prices haven’t been this low for the Fourth of July since 2021
7/3/2025 4:32 PM
Stay Updated
Subscribe to our newsletter for the latest financial insights and news.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.