Federal reserve pauses rate changes to watch economy

The Federal Reserve decided to keep interest rates steady, ranging between 4.25% and 4.5%, during their latest meeting. This marks the fourth time in a row they’ve chosen not to adjust rates. Fed Chair Jerome Powell explained that the U.S. economy is doing well, with low unemployment and a strong job market. However, inflation is still a bit higher than the Fed’s 2% goal.

Powell said the Fed is in a good spot to wait and see how things unfold before making any changes. He noted that there’s a lot of uncertainty, especially about how new tariffs might affect prices. While tariffs could push costs up, it’s unclear how big or long-lasting the impact will be. The Fed wants more information before acting. The Fed’s policymakers also shared their outlook.

Most expect at least two rate cuts this year, but some think no cuts might be needed. They also predict higher inflation and slightly slower growth than before. Powell emphasized that the Fed is ready to respond as new data comes in. This wait-and-see approach means the Fed will likely hold off on big decisions until at least September. Powell’s comments suggest they’re focused on balancing stable prices and strong employment while keeping an eye on global events and policy changes.