US Federal Reserve Holds Interest Rates Steady in 1st Meeting since Trump's Return to Office

The US Federal Reserve decided on Wednesday to keep interest rates unchanged, as uncertainty grows over President Donald Trump's impact on the US economy and inflation remains above the central bank's target levels.

This is the first time Fed policymakers have met since President Trump took office, who has made clear he wants to cut interest rates, with the benchmark rate now in a range of 4.25% to 4.5%.

The decision follows three consecutive cuts since September 2024, equivalent to a full percentage point, according to CNBC.

The statement that followed the meeting dropped some clues about the rationale behind the decision to keep rates steady, offering a somewhat more upbeat view of the labor market while missing a key reference from the December statement that inflation "has made progress toward" the Fed's 2% inflation target.

Rates remained at around 5.3% for a year and a half — the highest in more than a decade — before the Fed began its rate-cutting campaign in September. While inflation has fallen since then, it has remained stubbornly above the Fed’s 2% target rate. 

In December, inflation was 2.9%, up slightly from November, while the labor market showed an unexpected surge in growth last month, with more than 250,000 jobs added to the economy, and the unemployment rate remained at a relatively low level of around 4%.