FOMC Holds Rates; Slows QT Treasury Cap to $5B/Month

The FOMC held rates at 4.25–4.50% unanimously. The minutes highlighted tariff inflation risk as a key concern: staff modeled scenarios where tariff pass-through significantly boosted 2025 PCE inflation. Crucially, the Fed voted to slow the Treasury runoff cap from $25 billion to $5 billion per month effective April — a signal that quantitative tightening was approaching its endpoint as reserve management concerns emerged.