Overview

• The Federal Reserve has maintained its policy rate at 4.25%–4.50% since December, taking a cautious, data-driven approach to economic uncertainty.
• April's annual inflation rate slowed to 2.3%, the lowest in four years, while core inflation remained steady at 2.8%, exceeding the Fed's 2% target.
• Fed Vice Chair Philip Jefferson warned that sustained tariff increases could disrupt progress on inflation and lead to temporary price spikes.
• Chicago Fed President Austan Goolsbee described current economic data as noisy and inconclusive, complicating long-term policy decisions.
• Officials are closely monitoring declining business and household sentiment, as well as potential signs of weakening economic activity in hard data.