The U.S. Federal Reserve has decided to keep interest rates steady at 4.25% to 4.5%, despite significant pressure from President Trump for a rate cut. This decision reflects the Fed's cautious approach to balancing economic growth with rising risks of inflation and unemployment, driven partly by tariffs imposed by the Trump administration.
Fed Chair Jerome Powell emphasized the central bank's independence, noting the importance of a flexible monetary policy that adapts to changing economic conditions. The Fed's decision was unanimous, highlighting a commitment to maintaining stability amid economic uncertainties, including the potential impacts of ongoing trade tensions.
While the economy continues to expand, Powell warned of increasing risks associated with higher unemployment and persistent inflation. The Fed remains vigilant, ready to act swiftly should new economic data signal a need for policy adjustments.
Despite robust job growth and steady consumer spending, the Fed is closely monitoring the long-term effects of tariffs on inflation and economic growth. The central bank reaffirmed its goals of maximum employment and a 2% inflation target, prepared to alter its stance if necessary.
President Trump's repeated calls for lower rates and threats to remove Powell have not swayed the Fed's course. Powell's resolve has garnered international support, with colleagues praising his steadfastness in the face of political pressure. As the Fed navigates these complex challenges, its decisions will be crucial for the future trajectory of the U.S. economy.
