Consumers and traders are waiting to learn if the Fed’s pause is a one-meeting hold or the start of a longer stretch.

The Federal Reserve on Wednesday hit pause on interest rate cuts in its first key decision of President Donald Trump’s second term.

The decision reflects a cautious stance as the Fed assesses the direction of inflation and policies President Trump may implement.

Economists expect the Federal Reserve to keep interest rates unchanged as its Open Market Committee is set to conclude its meeting on Wednesday afternoon.

Policy changes: When the Fed adjusts the federal funds rate, it spills over into many aspects of the economy, including mortgage rates. The federal funds rate affects how much it costs banks to borrow money, which in turn affects what banks charge consumers to make a profit.

The Federal Reserve is widely expected to hold its key interest rate steady on Wednesday as officials wait for more data that indicates inflation is cooling.

Fresh tariffs amid high inflation are making the Fed’s job uniquely difficult and feeding uncertainty about what to expect for interest rates this year.

The first central bank meetings of 2025 suggest it will be a year in which policymakers go their own way as economic paths diverge, as the United States holds interest rates steady, the eurozone cuts,

EUR/USD declines to near 1.0370 as inflation in six states of Germany decelerates in January.

The FTSE 100 has hit another all-time high this morning, with the index up five per cent since the start of 2025. London’s main index rose 0.46 per cent this morning before dropping back slightly, while the more domestically focused FTSE 250 jumped 0.