Fed holds rates steady as it notes rising uncertainty and stagflation risk

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Last edited Wed May 7, 2025, 03:25 PM - Edit history (1)

Source: CNBC

Published Wed, May 7 2025 2:00 PM EDT Updated 12 Min Ago


WASHINGTON — The Federal Reserve on Wednesday held its key interest rate unchanged as it waits for the Trump administration’s trade policy to take shape and sees its impact on a sputtering economy.

In a move that carried little suspense given the wave of uncertainty sweeping the political and economic landscape, the Federal Open Market Committee held its benchmark overnight borrowing rate in a range between 4.25%-4.5%, where it has been since December.

The post-meeting statement noted the volatility and how that is factoring into policy decisions. “Uncertainty about the economic outlook has increased further,” the statement said. “The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”

While the statement did not specifically address the tariffs, Chair Jerome Powell addressed the issue at his post-meeting news conference.



Read more: https://www.cnbc.com/2025/05/07/fed-rate-decision-may-2025.html

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Article updated.

Original article -

Published Wed, May 7 2025 2:00 PM EDT Updated 1 Min Ago


The Federal Reserve on Wednesday held its key interest rate unchanged as it awaits fluctuations in trade policy and the direction of a sputtering economy.

In a move that carried little suspense given the wave of uncertainty sweeping the political and economic landscape, the Federal Open Market Committee held its benchmark overnight borrowing rate in a range between 4.25%-4.5%, where it has been since December.

The post-meeting statement noted the volatility and how that is factoring into policy decisions. “Uncertainty about the economic outlook has increased further,” the statement said. “The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.“

However, the statement did not specifically address the tariffs, though Chair Jerome Powell is sure to be asked about them in his post-meeting news conference.