Federal Reserve keeps interest rates unchanged says uncertainty over tariffs has diminished

The Federal Reserve on Wednesday once again left interest rates unchanged and kept its forecast for two cuts later this year — but said uncertainty on the economic impact of President Trump’s tariffs has “diminished.”In new economic projections, policymakers sketched a modestly stagflationary picture of the US economy, with economic growth slowing to 1.4% this year, unemployment rising to 4.5% by the end of this year, and inflation finishing 2025 at 3%, well above the current level.While policymakers still anticipate cutting rates by half a percentage point this year, as they projected in March and December, they slightly slowed the pace from there to a single quarter-percentage-point cut in each of 2026 and 2027 in a protracted fight to return inflation to the central bank’s 2% target.The Dow Jones Industrial Average rose 107 points, or 0.3%, after the report’s release, while the S&P 500 and Nasdaq jumped 0.2% and 0.3%, respectively.Ahead of Wednesday’s policy note, Trump continued to pressure “stupid” Fed Chair Jerome Powell to slash rates, arguing the key borrowing rate should be at least 2 percentage points lower.“Frankly, you probably won’t cut today,” Trump said outside the White House hours before the policy note’s release. “Europe had 10 cuts, and we had none.And I guess he’s [Powell] a political guy, I don’t know.

He’s a political guy who’s not a smart person, but he’s costing the country a fortune.”Trump mused that he would make a better Fed chair when Powell’s term expires next year.“Am I allowed to appoint myself at the Fed? I’d do a much better job than these people,” he said.

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The Fed’s decision to keep interest rates unchanged in the target 4.25% to 4.5% rang...