Federal Reserve Keeps Rates Steady at 4.25%-4.5%

The US Federal Reserve held interest rates at their target range of 4.25% to 4.5% at the conclusion of its meeting on Wednesday, amid growing concerns about a slowing economy and the return of inflationary pressures.

The US central bank is proceeding steadily, facing uncertainty over President Donald Trump's tariffs, an economy showing some signs of resilience—for example, April's payrolls—and a weak economy—such as the latest GDP report, according to CNBC.

The Fed's decision to hold interest rates steady came amid concerns about the impact of President Trump's trade war on inflation, which the central bank has been combating for the past two years.

Traders are listening closely to Federal Reserve Chairman Jerome Powell's speech, hoping he will shed more light on whether and when the central bank will cut interest rates. The Federal Reserve has held interest rates on hold since its last cut in December, pending an assessment of the impact of the tariffs.

Fed officials face a difficult task in determining how the economy will respond to Trump's economic policies, as analysts point to high inflation and weak growth this year—a dangerous combination akin to stagflation.

Over the past two years, the Fed has adopted a tight monetary policy to control inflation, which peaked at 9.1 percent in June 2022, its highest level in four decades. Between March 2022 and July 2023, the Fed raised interest rates by more than 5 percentage points, in one of the fastest monetary tightening cycles in modern history.