The Federal Reserve has labeled the U.S. economy as “in a solid position” despite “elevated uncertainty,” deciding to keep interest rates steady while economic officials wait to gauge the full impact of President Donald Trump’s policy changes.
On Wednesday, the central bank kept its benchmark lending rate steady at a range of 4.25% to 4.5%, where it has remained since January.
In his official address, Fed Chair Jerome Powell stated, “In support of our goals, today the Federal Open Market Committee decided to leave our policy interest rate unchanged. We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments.”
Powell said, “The unemployment rate remains low, and the labor market is at or near maximum employment. Inflation has come down a great deal but has been running somewhat above our 2 percent longer-run objective.”
Despite these comments, economists generally expect Trump’s unpredictable trade war to drive up prices and potentially contribute to rising unemployment.
In his post-meeting news conference, Powell opened up about tariffs, stating, “We have to learn more about tariffs. I don’t know what the right way for us to react will be. I think it’s hard to know with any confidence how we should react until we see the size of the effects.”
Powell agreed that he expects Trump’s tariffs to eventually result in higher inflation, but he stated that the extent remains unclear.
By CEO NA Editorial Staff
