Federal Reserve Maintains Rates Amid Rising Concerns Over Inflation and Unemployment

Fed Stands Pat on Rates Again Amid Tariff Uncertainty, Markets Await Powell’s Outlook

The U.S. Federal Reserve kept interest rates unchanged on Wednesday, maintaining its federal funds target range at 4.25%–4.50% as policymakers continue to grapple with conflicting economic signals and geopolitical turbulence.

This marks the third consecutive meeting where the central bank has opted to hold rates steady, reinforcing a cautious stance as inflation remains elevated and job market conditions show early signs of softening.

“The Committee is attentive to the risks to both sides of its dual mandate,” the Fed noted in its statement. “Uncertainty about the economic outlook has increased further,” citing growing concerns over both inflationary pressures and potential labor market weakness.

The announcement landed as markets digested broader macroeconomic pressures, including the Trump administration’s aggressive global tariff push — a move that’s clouded the inflation outlook and weighed on business sentiment.

Bitcoin (BTC), which had seen gains earlier in the week, slipped to $96,600 following the Fed’s decision, down from Tuesday’s brief rally high amid optimism around trade negotiations with China.

While investors still expect as many as three rate cuts in 2025, likely starting in July, Fed officials remain wary. The effects of ongoing trade policy shifts are difficult to predict, and policymakers have stressed the need for clearer economic data before adjusting course.

All eyes now shift to Chair Jerome Powell’s 2:30 p.m. ET press conference, where markets hope to glean additional signals on how the Fed plans to steer policy through the remainder of the year.