The U.S. central bank has decided to pause its planned interest rate cuts as concerns over rising inflation resurface, particularly in the volatile food sector. On Wednesday, Jan. 29, the Federal Reserve opted to maintain its current benchmark rate, reversing its recent trend of reducing rates aimed at curbing the inflationary pressures sparked by the COVID-19 pandemic.
Analysts suggest that this move reflects the Federal Reserve's cautious approach amid uneven economic recovery. While lower interest rates were intended to support consumers and businesses during the pandemic-induced downturn, the uptick in core inflation indicates that the economy may be heating up again.
This decision not only affects financial markets but also places the Fed at a potential crossroads with political figures, including President Donald Trump, as the pause in rate cuts could have implications for economic policies and recovery strategies.
Owen Fairclough reports.
Reference(s):
cgtn.com
