Federal Reserve Holds Rates Steady as Tariff Policies Drive Economic Uncertainty

The Fed projects slower growth, higher inflation, and rising unemployment for 2025, citing the impact of President Trump's aggressive tariff agenda.

The Federal Reserve kept interest rates at 4.25%-4.5%, maintaining its forecast for two rate cuts later in 2025.
Economic growth projections for 2025 were lowered from 2.1% to 1.7%, while inflation expectations rose to 2.7%, partly attributed to tariff-driven price increases.
Consumer sentiment has dropped to a three-year low, reflecting widespread concern over inflation, personal finances, and labor market conditions.
Unemployment is expected to rise to 4.4% by the end of 2025, up from the current rate of 4.1%, as economic uncertainty persists.
Fed Chair Jerome Powell acknowledged that tariffs are delaying progress in lowering inflation and increasing economic unpredictability.