Federal Reserve Holds Rates Steady

The United States — Federal Reserve kept its key interest rate unchanged for the fourth consecutive meeting, maintaining it at 4.25%-4.5%. Despite this, United States — Federal Reserve officials still foresee two interest rate cuts by the end of this year, though they now project only one cut in 2026, down from two. The central bank's latest quarterly projections indicate noticeably weaker growth, higher inflation (rising to 3% by year-end from 2.1% in April), and slightly higher unemployment (4.5% from 4.2%) by the end of this year. United States — Federal Reserve Chair Jerome Powell and other officials are holding off on rate changes due to uncertainty surrounding the impact of Donald Trump's tariffs, which were announced on April 2 and mostly postponed on April 9. Many policymakers are concerned these duties could boost prices and create sustained inflation. Donald Trump has criticized Jerome Powell for not cutting rates, calling him a 'numbskull' and 'stupid,' arguing that rate cuts would boost the economy and reduce the federal government's borrowing costs. Other central banks, including the United Kingdom — Bank of England, European Union — European Central Bank, and Royal Bank of Canada, have reduced their rates this year, partly due to United States tariffs weakening their economies, while the Japan — Bank of Japan kept its rate unchanged.