Federal Reserve leaves interest rate unchanged as it waits for Trump economic policy to take hold
The Federal Reserve said Wednesday it was leaving interest rates unchanged — but warned of rising uncertainty about the direction of the economy, in part because of President Donald Trump's tariff agenda.
The Federal Reserve said Wednesday it was leaving interest rates unchanged — but warned of rising uncertainty about the direction of the economy, in part because of President Donald Trump's tariff agenda.
The Fed said its key federal funds rate, which serves as a benchmark for interest rates throughout the economy, would remain at about 4.5%.
Though it said current economic conditions were solid, the central bank lowered its forecast for gross domestic product, a measure of the total value of all goods and services produced within the United States, for the rest of the year, to 1.7%, down from 2.1% in December. It also warned that a key measure of inflation would now be closer to 3% than 2%.
Eighteen of 19 policymakers now say there's increased risk that GDP will fall, compared with just five in December. Meanwhile, 11 policymakers say the unemployment rate could climb to as much as 4.5% this year, up from five previously.
"Uncertainty around the economic outlook has increased," the Fed's statement said.
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