The US Federal Reserve has held interest rates steady at 4.25%-4.5%, but signaled the possibility of two cuts later this year. Inflation projections have been raised to 3%, while economic growth forecasts were downgraded to 1.4%, partly due to President Donald Trump’s escalating tariff plans.
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Fed Holds Rates, Signals Two Cuts Amid Trump’s Tariff Pressure
Fed Chair Jerome Powell warned tariffs could temporarily or persistently increase inflation, depending on their duration and scale. Despite Trump’s public insults calling Powell “stupid,” the Fed emphasized its independence and data-driven decision-making.
Policymakers remain divided, with seven of nineteen officials expecting no cuts in 2025, reflecting ongoing uncertainty in the economic outlook.
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