The Fed Holds Interest Rates at 4.25–4.50% Indicating The Fed Remains Cautious About Economic Uncertainty
The Federal Reserve has maintained the benchmark interest rate in the range of 4.25%–4.50% in its May 2025 decision, in line with market expectations. There were no surprises, but there is still no further certainty regarding the direction of future policy.
This decision reinforces The Fed's stance of being 'wait and see', amid the complexity of global economic dynamics that have not yet fully stabilized. Inflation has indeed started to ease, but pressures from trade tariffs, geopolitical tensions, and the potential slowdown of global growth remain significant variables that are hard to ignore.
The Fed seems to prefer monitoring more data ahead before making significant changes. This is not just about inflation or unemployment data, but also the market's sensitivity to uncertainties that could be triggered by fiscal policy, such as the potential adjustment of import tariffs from several key US trading partner countries.
For market players, this cautious stance can be interpreted as a commitment to long-term stability, even though at the same time it may delay the potential acceleration of recovery or the anticipated easing.
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