The Federal Reserve voted unanimously to maintain interest rates at 4.25-4.50%, signaling a pause in its recent rate-cutting cycle amid uncertainty over President Trump’s economic policies.
This decision marks the end of three consecutive meetings with rate cuts and maintains the benchmark rate between 4.25% and 4.50%. Fed Chair Powell’s “wait and see” approach emphasizes the need for either clear signs of labor market weakness or improved inflation data before considering additional rate adjustments.
The stance has drawn criticism from President Trump, who accused Powell of failing to address inflation problems. The uncertainty surrounding potential tariffs and fiscal policy changes has complicated the Fed’s decision-making process, with economists divided on whether the central bank will be able to achieve its 2% inflation target given the proposed policy changes.
While the Fed’s December forecast suggested two quarter-point cuts in 2025, the timeline remains fluid as officials assess the impact of their current restrictive policy stance and monitor evolving economic conditions.