Fed Leaves Rates Steady, Flags Escalating Threats of Price Pressures and Job Losses

Fed Sticks to Its Guns on Rates Amid Economic Headwinds; Focus Shifts to Powell’s Remarks

In a move that was expected by most, the U.S. Federal Reserve kept its key interest rate unchanged at 4.25%-4.50% on Wednesday, signaling its third consecutive pause in tightening monetary policy. The decision comes as economic uncertainties mount, fueled by persistent inflation and global trade tensions.

In a statement following the meeting, the Fed acknowledged that “uncertainty about the economic outlook has increased” and pointed to heightened risks on both sides of its dual mandate—price stability and full employment. The central bank noted that inflation remains well above its 2% target, while concerns about rising unemployment persist in the face of cooling growth.

Bitcoin (BTC), which had surged above $97,000 earlier this week on hopes of an easing in U.S.-China trade tensions, retreated to $96,600 following the Fed’s decision, reflecting broader market caution.

The Fed’s stance comes amid ongoing worries about the impact of tariffs from the Trump administration, with questions about how they might affect consumer prices and corporate profits. While inflation has remained stubbornly high, economic indicators are showing signs of slowing.

Looking ahead, market participants are still predicting three rate cuts this year, with the first reduction likely to occur in July. However, Fed members have made it clear that they are in no rush to act, opting to wait for further clarity on the effects of trade policies before altering the course of monetary policy.

As the market digests the Fed’s latest moves, all eyes will now turn to Fed Chair Jerome Powell’s post-meeting remarks at 2:30 p.m. ET. Investors are hoping for additional guidance on the central bank’s future plans, as the economic landscape remains clouded by trade tensions and inflationary pressures.