Federal Reserve Holds Interest Rates Steady Amid Economic Uncertainty
In its May 7, 2025, policy meeting, the Federal Reserve decided to maintain the federal funds rate at the current range of 4.25% to 4.50%, marking the fourth consecutive meeting without a change.
This decision aligns with widespread expectations, as the central bank continues to navigate a complex economic landscape characterized by persistent inflation and geopolitical uncertainties.
Despite a slight contraction in the U.S. economy during the first quarter of 2025, with GDP declining at an annualized rate of 0.3%, the labor market remains robust. April saw the addition of 177,000 jobs, and unemployment held steady at 4.2%.
However, core inflation remains above the Fed’s 2% target, partly due to recent tariff implementations, including a 145% import tax on Chinese goods, which have contributed to rising consumer prices.
President Donald Trump has repeatedly called for immediate rate cuts to stimulate economic growth, especially in light of the upcoming election cycle. Nevertheless, Fed Chair Jerome Powell has emphasized the importance of a data-driven approach, stating that the central bank will not be swayed by political pressures and will act based on economic indicators.
Kosta joined the team in 2021 and quickly established himself with his thirst for knowledge, incredible dedication, and analytical thinking. He not only covers a wide range of current topics, but also writes excellent reviews, PR articles, and educational materials. His articles are also quoted by other news agencies.
