Fed holds tight
The Big Story
The Federal Reserve kept interbank interest rates at a range of 4.25 to 4.5 percent Wednesday amid trade policy fluctuations and pressure from President Trump.
© The Associated Press
Fed officials stressed the overall health of U.S. economic conditions, which has seen decreasing inflation in recent months along with steady levels of low unemployment.
'What we're waiting for, to reduce rates, is to understand what will happen with the tariff inflation. There's a lot of uncertainty about that,' Federal Reserve Chair Jerome Powell said Wednesday.
'Someone has to pay the tariffs … between the manufacturer, the exporter, the importer, the retailer, ultimately somebody putting it into a good of some kind – or just the consumer buying it.'
The unemployment rate has held at 4.2 percent in its past three readings, with about 7 million people out of work in a labor force of 170 million.
President Trump has been calling for the Fed to resume its interest rate cuts, which it started in the back half of last year but has paused since January after inflation ticked up over the fall.
Trump went so far as to call Powell a 'numbskull' recently for maintaining his pause, which will increase interest costs on sky-high U.S. debt levels that are likely to be made worse by GOP tax-and-spending cut legislation now making its way through Congress.
However, markets and economists expected the Fed to maintain rates while businesses react to Trump's tariffs.
Tobias Burns has more here.
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Essential Reads
Key business and economic news with implications this week and beyond:
Fannie, Freddie oversight chief to Powell: Cut rates or resign
The head of the federal agency responsible for overseeing Fannie Mae and Freddie Mac called Wednesday for Federal Reserve Chair Jerome Powell to resign if the central bank did not cut rates that day.
Fed predicts higher inflation, slower growth for US economy
The U.S. central bank sees lower economic growth, higher unemployment and higher prices amid major changes in U.S. trade policy and worsening geopolitical tensions.
Honda recalls over 259,000 cars due to brake pedal issue
Honda is recalling more than 259,000 vehicles across the U.S. due to a problem that can cause the brake pedal to shift out of position.
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