Inflation and Policy Decisions
officials cited rising inflation risks as a key reason for maintaining the benchmark interest rate at 4.3%, after previous cuts from a two-decade high of 5.3%.
Concerns include 's proposed tariffs, mass deportations, strong consumer spending, and a "high degree of uncertainty" surrounding the economy, influencing the cautious approach to future interest rate adjustments.
Economic Outlook and Market Reactions
Despite a recent government report indicating worsening inflation, the Fed's focus remains on seeing further progress on inflation before any additional cuts, with Wall Street anticipating the next cut possibly in July.
Fed officials express mixed views on the impact of Trump's tariffs, with some expecting them to push up inflation while others believe any increase in prices would likely be temporary, emphasizing the need for careful policy consideration.