The Federal Reserve yesterday announced that it will leave the key funds interest rate at 4.25% to 4.5%, which leaves in place a pause that has been in effect since January. The pause follows a series of rate cuts that took effect in late 2024.
“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the central bank said in a statement. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”
Reporting in The New York Times shows that Federal Reserve chairman Jerome H. Powell is cautious to signal future rate cuts because of the possible effects of Trump administration tariffs:
“Jerome H. Powell, the Fed chair, conceded at a news conference that tariffs meant ‘further progress may be delayed’ on getting inflation back to the central bank’s 2% target, a recognition that was also reflected in higher inflation forecasts officials penciled into new economic projections released on Wednesday.”
Recent reporting in Soundings Trade Only’s Pulse Report shows that boat dealers continue to be challenged by elevated interest rates. “Access to credit, stricter underwriting and higher unit pricing [are] still deterring buyers,” one dealer said in response to the monthly survey.
“The year 2024 was our slowest year for sales in the past decade, with January 2025 our second-slowest January ever. Buyers remain shocked at finance rates and new-boat pricing,” said another.
The central bank will meet again in May to determine possible interest rate changes.
