Federal Reserve interest rate decision May 2025: What to know about the economy ahead
The Federal Reserve was expected to leave interest rates unchanged Wednesday as it continued to assess the impact of President Donald Trump’s tariffs.
The Federal Reserve was expected to leave interest rates unchanged Wednesday as it continued to assess the impact of President Donald Trump’s tariffs.
But it still faces the prospect of worsening inflation, even as Trump pressures monetary policymakers at the Fed to cut rates to buoy the economy.
The central bank’s federal funds rate was expected to remain unchanged at a target of 4.25% to 4.5%. The rate is a benchmark for everything from auto loans to credit cards and personal loans. Their rates remain well above pre-pandemic levels, with credit card rates hovering at more than 21%. Auto loan interest rates have come down more substantially.
Home mortgage rates are less tied to the federal funds rate, instead closely tracking government borrowing costs, which have also remained elevated.
Investors believe the Fed will continue to hold interest rates steady through its next meeting in June, with the first cut of 2025 coming in July.
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