


Federal Reserve Holds Interest Rates Steady Amid Inflation Concerns and Political Pressure
The Federal Reserve maintains interest rates at 4.25%-4.5% as inflation projections rise, with President Trump urging cuts despite economic forecasts.
Hoping for lower borrowing costs? Fed likely to stand pat again

Associated Press

Powell risks Trump's wrath with Fed interest rate decision

Washington Examiner
Overview
- The Federal Reserve has kept interest rates unchanged at 4.25% to 4.5% for the fourth consecutive meeting amid economic uncertainty.
- Officials anticipate inflation to rise to 3% by year-end, prompting discussions of potential rate cuts despite lower growth projections.
- President Trump has criticized Fed Chair Jerome Powell for not lowering rates, calling him 'stupid' and 'political' in his demands.
- The average credit card APR is around 20-25%, while high-yield bank accounts offer rates from 3.6% to 5%.
- The Fed projects a 1.4% economic growth rate and an increase in the unemployment rate to 4.5% this year.
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Analysis
Left-leaning sources frame the Federal Reserve's decisions as cautious and influenced by external pressures, particularly from Trump. They emphasize rising inflation and stagnant growth, reflecting a critical perspective on economic management. The tone suggests concern over the implications for consumers, highlighting the challenges posed by current financial conditions.
Anyone with savings that they want to invest in stable, low-risk, interest-yielding assets is in luck.

The average money market fund yielded 4.10 percent.

The central bank has so far defied Trump’s attacks on its decisions, holding firm on its independence from the White House.

Center-leaning sources present a cautious perspective on the Federal Reserve's decision to maintain interest rates, emphasizing stability amid economic uncertainty. They highlight implications for consumers, such as credit card rates and mortgage forecasts, while subtly critiquing the prolonged high rates, reflecting a concern for financial impacts on everyday Americans.
The Federal Reserve has maintained its key interest rate at 4.25% to 4.5% for the fourth consecutive meeting.



The average credit card annual percentage rate (APR) is approximately 20-25%.



Policymakers have more time to assess how the economy responds to tariffs, layoffs and geopolitical conflict.

Right-leaning sources frame the Federal Reserve's actions and projections with skepticism, emphasizing potential economic downturns and inflation concerns. They highlight Trump's criticism of Powell, suggesting a bias towards advocating for lower borrowing costs. The tone reflects apprehension about the Fed's decisions and their implications for the economy.
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"…Those figures suggest inflation is largely coming under control, for now."


"…There are many developments ahead, even in the near term, developments are expected on tariffs."


"…Uncertainty about the economic outlook has diminished but remains elevated."


"…The decision comes as policymakers weigh signs of a weakening economy."


"…It may be especially good news for retirees, who are usually advised to keep a year’s worth of living expenses in interest-bearing accounts so that they won’t have to sell stocks from their portfolio when the market is down."


"…The economy could soon buckle as Trump’s tariffs begin to force shoppers to pull back on their spending, eventually sending unemployment higher as company profits take a hit."


"…The Federal Reserve decided Wednesday to maintain interest rates at 4.25%-4.5% despite constant pressure from the Republican president, who shows little respect for the central bank’s independence."


"…For now, analysts say the Fed remains in wait-and-see mode."


"…The economic backdrop is worrisome, with signs that the job market is slowing down and inflation pressures persisting."


"…The combination of high debt and rising bond yields can be costly not just for the government but also for taxpayers."


"…The Fed last lowered interest rates in December, bringing its benchmark short-term rate to a range of 4.25% to 4.5%."

"…The combination of persistent uncertainty alongside solid economic performance may prompt the Fed to hold interest rates steady on Wednesday."


"…With the economy potentially pulling in both directions, Powell and other Fed officials have underscored in recent remarks that they are prepared to wait for clearer signals on which way to move."


"…The central bank also expects inflation to worsen in the coming months, but it still foresees two interest rate cuts by the end of this year, the same as it had projected in March."


"…Keeping the rate unchanged would signal ongoing caution from the Fed as it continues to monitor how Mr. Trump's economic policies will play out."


"…The Federal Reserve maintained its position that the economy was stable, even as uncertainty among participants was rising."


"…The overall expectation from Wall Street is that there will be no change in the base rate, but here are some of the headline factors which may be influencing Chair Powell’s final decision to be announced later today."


"…Those figures suggest inflation is largely coming under control, for now."

"…Mortgage rates, which have been stuck near 7% for the past several months, are likely to stay higher for longer."


"…With interest rate cuts on pause for now, here's how you can focus on saving more and spending less where it counts."


"…Although the federal funds rate only directly dictates lending between banks, the central bank's monetary adjustments are typically passed on to consumers, affecting financing rates on loans and credit cards."


"…With interest rates currently holding steady, there's still time to maximize your earnings with a high-yield savings account or CD."


"…Prospective homebuyers who have been waiting for mortgage rates to drop for the past few years may soon have to adjust to the "higher for longer" rate environment, with mortgage loan rates fluctuating between 5% and 7% over the longer term."


"…Mortgage rates are likely to stay in the 6.75% to 7.25% range unless the Fed signals multiple cuts and backs up their policy with data."


"…Despite elevated uncertainty, the economy is in a solid position as the unemployment rate remains low and the labor market is at or near maximum employment."

"…The president added, "We have a man who just refuses to lower the Fed rate. Just refuses to do it. And he's not a smart person.""


"…The Fed is widely expected to leave interest rates unchanged this week, which would make it four straight meetings in which the central bank has left rates unchanged."


"…The Federal Reserve on Wednesday once again left interest rates unchanged and kept its forecast for two cuts later this year — but said uncertainty on the economic impact of President Trump’s tariffs has “diminished.”"


"…The Fed kept its key rate unchanged for the fourth straight meeting Wednesday, and said the economy is expanding at “a solid pace.”"


"…Yet the Fed’s short-term interest rate remains at an elevated level intended to slow growth and inflation."


"…The Fed is in “an uncomfortable purgatory,” said Diane Swonk, chief economist at accounting giant KPMG."


"…However, Powell has a different set of priorities."


"…The housing market would be in much better shape if Chairman Powell does this."

"…The Fed's decision on Wednesday to leave the policy rate in its current 4.25%-4.50% range was unanimous."

"…The central bank is signaling that while it may still cut rates this year, those cuts—if they come—will be modest and contingent on further declines in inflation."


"…The Fed’s decision to maintain its target range at 4.25% to 4.5% met economists’ expectations."


"…The U.S. central bank says the U.S. economy remains solid but the outlook has ‘diminished.’"


FAQ
The Federal Reserve kept interest rates steady to address rising inflation projections and maintain a cautious monetary policy amid ongoing economic uncertainty, aiming to avoid fueling price increases further or destabilizing the job market.
The Federal Reserve now projects inflation to reach 3% by year-end 2025, up from the previous March forecast of 2.7%. Real GDP growth is expected to slow to 1.4% this year, and the unemployment rate is projected to rise to 4.5%[2].
President Trump has publicly urged the Fed to cut rates, criticizing Fed Chair Jerome Powell for not doing so, while the Fed has maintained rates to balance inflation risks and economic stability despite political pressure[4].
The current federal funds rate is in the range of 4.25% to 4.5%. This level is significant because it influences borrowing costs across the economy and is set to manage inflation without triggering a recession or overheating the labor market[4].
The Fed’s steady rate policy is likely to keep credit card APRs high (currently around 20–25%) and help sustain elevated rates for high-yield savings accounts, which presently offer between 3.6% and 5%[4].
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