- The Fed left interest rates unchanged, reflecting uncertainty over inflation and growth.
- Gold has hit record highs even with high interest rates, signaling strong demand.
- A Gold IRA offers protection against inflation and recession in times of uncertainty
The Fed Keeps Rates Unchanged in Uncertain Climate
In the face of rising uncertainty, the Federal Reserve has decided to leave interest rates unchanged for the second straight meeting. That uncertainty isn’t just affecting policymakers. It’s spilling over into the lives of everyday Americans. With inflation running hotter than expected and the risk of a recession growing, now is the time for individuals to take steps to protect their savings. Opening a Gold IRA could provide a crucial hedge against both inflation and economic slowdown.
The Fed Holds Rates Steady – But for How Long?
1
In its latest meeting, the Federal Reserve decided to leave interest rates unchanged at 4.25% to 4.5% for the second consecutive time. This decision reflects the Fed’s growing concern over the state of the economy and the challenges posed by persistent inflation and slow growth. Despite earlier projections for three rate cuts this year, Fed officials are now signaling just two cuts. While some are even suggesting there may be none at all.
The Fed’s latest economic forecast paints a mixed picture. Policymakers now expect the economy to grow by just 1.7% in 2025. Down from an earlier projection of 2.1%. Inflation is expected to rise to 2.8% by the end of the year. That’s higher than the 2.5% estimate made in December. Unemployment is also projected to increase to 4.4%.2
Fed Chair Jerome Powell acknowledged the growing uncertainty. He stated that “uncertainty around the economic outlook has increased.” While he maintains that the economy remains fundamentally strong, the combination of rising inflation and slowing growth puts the Fed in a difficult position. Lowering rates could stimulate growth but might worsen inflation. Keeping rates high could help fight inflation but risks dragging the economy into a recession.3
Trump and the Fed
The economic policies of President Trump are adding to the Fed’s dilemma. Powell has carefully avoided commenting directly on Trump’s tariff policy. But the effects are becoming harder to ignore. Trade wars typically fuel inflation while also slowing economic activity. A dangerous combination for the Fed that can result in stagflation.
Powell recently admitted that tariffs could delay progress on inflation, saying, “Clearly, some of it [inflation] is from tariffs.” If tariffs push inflation higher, the Fed may need to keep rates elevated longer than expected. But if tariffs slow growth too much, rate cuts could be needed to prevent a recession. This creates a policy trap, where the Fed is forced to choose between curbing inflation or supporting economic growth.
The Trump administration recognizes that economic disruption is possible as they fix and transform the economy. With a long-term view, Commerce Secretary Lutnik even suggested that a recession would be “worth it.”
Wall Street Braces for a Slowdown
The news of a recession sent stocks on a downturn. Powell admitted that there is now a 1 in 4 chance of a recession — a notable increase from previous estimates.
Market analysts are adjusting their forecasts in response to the shifting outlook. Goldman Sachs has lowered its 2025 GDP growth forecast from 2.2% to 1.7% and expects inflation to rise to 3% from the current 2.6%. JPMorgan Chase and Barclays have also trimmed their growth estimates. Barclays now predicts just 0.7% growth in 2024 — a steep drop from its earlier forecast of 2.5%.4
Interest rate cuts, once seen as a sign of economic relief, are now being interpreted as a warning sign. If the Fed cuts rates too aggressively, it could signal that the economy is in more trouble than previously thought. On the other hand, if the Fed holds rates too high for too long, it risks triggering a deeper slowdown.
The CME FedWatch tool currently shows a 32% chance of two 25-basis point cuts in 2025. Goldman Sachs anticipates two cuts this year and one more in 2026 — but only if tariffs don’t spark further inflation. Comerica predicts a single rate cut in July. Analysts expect the Fed to take a “wait and see” approach, likely cutting rates in June and December based on incoming data.5
Conclusion
As the Fed wrestles with a cloudy economic future, there are steps you can take to secure your savings. Gold has long been a trusted hedge against both inflation and recession. When inflation rises, gold tends to increase in value as the dollar weakens. During economic slowdowns, gold’s intrinsic value and safe-haven status make it a reliable store of wealth when other assets lose value.
Gold recently hit a record high of over $3,000 per ounce in March 2025 despite high interest rates, which usually weigh on gold prices. This shows strong demand from investors seeking long-term security. If the Fed begins cutting rates, gold prices are likely to climb even higher. Holding precious metals in a Gold IRA can provide the stability your portfolio needs.
To find long-term certainty in uncertain times, call American Hartford Gold at 800-462-0071 today to open your Gold IRA.
