Fed holds rates steady despite pressure from Trump

The Federal Reserve’s interest rate setting committee held rates steady Wednesday at a range of 4.25 percent to 4.5 percent, despite calls from President Trump to lower borrowing costs amid price pressures from his trade war.

Wednesday’s rate hold was the third in a row, following pauses during meetings in March and January, after the central bank cut rates three times in the back half of 2024.

The Fed’s move was in line with market expectations. One prediction algorithm based on future contract prices put the probability of a hold at about 98 percent just prior to Wednesday’s announcement.

Fed officials had also emphasized the sturdiness of the domestic economy and the uncertainty driven by Trump’s tariffs, along with how they complicated plans for future rate cuts.

Fed Chair Jerome Powell said during a Wednesday press conference that solid fundamentals in the economy afford the central bank to see how new trade, fiscal and regulatory policies will unfold.

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