The Federal Reserve said Wednesday it is leaving its benchmark interest rate unchanged, resisting pressure from President Trump to lower U.S. borrowing costs as policy makers assess the economic impact of his trade policies.
By the numbers
The Fed said it will maintain the federal funds rate at its current range of 4.25% to 4.5%, where it’s been parked since the central bank last moved to lower short-term rates in December.
The federal funds rate — the rate banks charge each other for short-term loans — helps determine what businesses and consumers pay in interest on loans and credit card debt.
What the Fed decision means
The Fed’s to hold interest rates steady comes amid pressure from Mr. Trump to cut interest rates, with the president writing on social media last month that the central bank has been “TOO LATE AND WRONG” for holding off on further reductions.
Economists are forecasting that Mr. Trump’s tariffs will boost inflation later this year. That could provide the Fed with the impetus to cut rates, although inflation cooled in March.
Given more subdued inflation and a buoyant job market, most economists had projected that the Fed would maintain interest rates at today’s meeting, despite some headwinds such as eroding consumer confidence and a sharp decline in first-quarter U.S. economic growth.
“The reality is that corporate earnings have been pretty strong, the U.S. economy barreling along and the biggest cause for concern is sentiment,” Scott Helfstein, head of investment strategy at investment firm Global X, said in an email before the latest Fed meeting.
He added, “There isn’t a good reason to change rates at this point, and the Fed is likely to reiterate the need for more data with three rate cuts priced in for 2025, at this point starting in the summer.”
—This is a breaking news story and will be updated.
