Spot Silver extended a pullback from recent 20-week high of $34.24 on Thursday, while the US Dollar rose for a second day, as market players assessed the latest Fed policy decision.
The Federal Reserve flagged two potential interest rate cuts by the end of 2025 amid expectations of slower GDP growth and higher inflation.
The Fed kept its federal funds rate target range without change at 4.25%-4.50% at its March meeting, in line with market consensus.
FOMC policy makers noted that although uncertainty over the economic outlook had increased, interest rates could be reduced by about 50 basis points by year-end to support growth.
The US central bank revised down its 2025 GDP growth forecast to 1.7% from 2.1% in the December projection. And, the 2026 forecast was revised down to 1.8% from 2% previously.
Additionally, annual core PCE inflation forecasts were revised up, as follows:
– for 2025 – to 2.7% from 2.5%;
– for 2026 – to 2.2% from 2.1%.
“We’re not going to be in any hurry to move,” Fed Chair Jerome Powell said at the FOMC press conference following the policy decision.
“Our current policy stance is well-positioned to deal with the risks and uncertainties we face … The right thing to do is to wait here for greater clarity about what the economy is doing.”
According to Swissquote Bank analyst Ipek Ozkardeskaya, the prospect of interest rate cuts which would reduce the probability of recession could provide support to the US Dollar.
Markets have fully priced in a Fed rate cut in July.
The US Dollar Index was last up 0.28% to 103.752.
Spot Silver was last losing 0.50% on the day to trade at $33.62 per troy ounce.
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