#FOMCMeeting FOMC Meeting May 2025: Fed Holds Rates Steady Amid Cautious Outlook

At its May 2025 meeting, the Federal Reserve chose to keep the federal funds rate unchanged at 4.25%-4.50%. Despite a slight economic contraction of 0.3% in Q1 and inflation easing to 2.6%, the Fed remains cautious due to a stable job market and potential inflation risks from newly proposed tariffs by President Trump. While markets initially expected a rate cut in June, the outlook has shifted toward July. The Fed emphasized its data-dependent approach, aiming to carefully balance economic stability with ongoing inflation management.