Divya Delhi: Economists and financial analysts expect the US Federal Reserve to maintain interest rates while leaving the door open for rate reduction later this year. Amid global uncertainty and internal budgetary concerns, the Fed has been cautious about increasing its federal funds rate, which is 4.25% to 4.50%. Sonal Badhan, Economics Specialist at Bank of Baroda, said ANI, “We expect Fed to keep rates unchanged as it has guided on multiple occasions that the central bank will watchout for tariffs and inflation before cutting rates. We expect Fed rate drop in Sep'25.” Recent auctions of long-term US Treasury bonds have seen low investor demand, creating fiscal concerns. Badhan said, “Weak investor demand is mainly reflective of lower confidence in government fiscal health and growth scenario. Investors and the US government disagree over its high debt and recent tax bill. The Fed has raised concerns about its inflationary influence on the economy. She also noted that tariff war uncertainty has decreased economic forecasts, encouraging foreign investors to diversify. She said, “We do not see movement in yields to have an impact on Fed’s decision.”