Explainer: What the U.S. Federal Reserve is watching this year

Explainer: What the U.S. Federal Reserve is watching this year

Federal Reserve is expected to keep interest rates unchanged when it wraps up its first policy meeting of the year on Wednesday.. The U.S. economy has added more than 20 million jobs since emerging from recession in 2009, and the unemployment rate is currently near a 50-year low at 3.5%.. The economy grew 2.9% in 2018, but Fed officials forecast economic growth to be around 2.2% last year due to the fading impact of the Trump administration's tax-cut package and slowing global growth.. Fed officials have already said if it weakens beyond the trend pace, that could prompt another interest rate cut.. So if inflation moves further away from the 2% target on a sustained basis, the Fed could see a need to cut interest rates again in order to try and boost it.. The spillover from escalating tit-for-tat tariffs between the world's two largest economies has caused a drop in U.S. business investment, and put U.S. manufacturing in recession.. More recently, in 2015, the Fed raised rates less than it planned as financial markets dropped on concerns over slowing Chinese economic growth.. Investors have brought forward estimates of a Fed rate move, with now roughly even odds the U.S.