The U.S. Federal Reserve has decided to keep its key interest rate unchanged at 4.3%, marking the third consecutive meeting without a rate change, despite calls from U.S. President Donald Trump to reduce borrowing costs. The decision came amid growing uncertainty about the U.S. economy, particularly due to Trump’s ongoing tariff policies.
Fed Chair Jerome Powell emphasized that while the U.S. economy remains resilient, with steady job gains and moderate inflation cooling from its peak, the uncertainty surrounding the impact of tariffs on inflation and employment is still unclear. Powell expressed that the Fed cannot yet determine the full effects of the tariffs, noting that their impact could either be temporary or more persistent.
Trump’s tariffs have added to the complexity of the Fed’s decision-making. The administration imposed high tariffs on over 60 U.S. trading partners, including a 145% tariff on Chinese goods, but paused many of them for 90 days in April.
