The Fed kept rates steady at 4.25–4.5%, sticking to a cautious “wait and see” strategy.
Tariff concerns and inflation risks remain central to the Fed’s decision to pause rate changes.
Trump’s push for rate cuts was dismissed, while crypto markets saw mild post-Fed declines.
The US Federal Reserve has decided to keep interest rates unchanged, maintaining its current rate range of 4.25% to 4.5%. This outcome aligns with market expectations and confirms Federal Reserve Chair Jerome Powell’s earlier statements about adopting a “wait and see” approach. Crypto markets showed mild declines following the announcement, while President Donald Trump's call for immediate rate cuts was not acted upon.
Federal Reserve Signals Patience Amid Tariff Uncertainty
The Federal Open Market Committee voted unanimously to hold interest rates steady. This marks the third consecutive meeting without a rate change. Chair Jerome Powell said, “Right now, the appropriate thing to do is to wait and see how things evolve.”
https://twitter.com/santimentfeed/status/1920180419854541015
The Fed cited ongoing uncertainty over tariff policies introduced by the Trump administration as a major factor influencing its decision. Powell pointed out that these tariffs could “lead to inflation, slowing the overall economic growth and jobless rates”. These concerns leave the Fed balancing between two risks.
According to an official statement, “The Committee is attentive to the risks to both sides of its dual mandate.” Financial markets responded predictably, with stocks moving higher as the Fed’s decision matched expectations. Treasury yields dipped slightly, and the US dollar strengthened against other currencies.
Trump's Rate-Cut Demands Rejected Amid Mixed Economic Signals
President Trump has repeatedly pushed for rate reductions, calling on the Fed to ease borrowing costs. However, Powell reiterated the central bank's independence and the need for solid data before any policy shift.
According to an observation by Nomura Capital Management’s Matthew Pallai, the Fed may be forced to act later than ideal, writing, “They may need to run a higher risk of falling into recession than most would like.”
Crypto assets saw mild declines after the Fed’s decision, with traders interpreting the lack of stimulus as bearish in the short term. The CME FedWatch tool now shows a 76.8% chance of rates holding steady again in June.
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