The Federal Reserve announced Wednesday that it will keep its benchmark interest rate unchanged, maintaining the target range at 4.25% to 4.5% as policymakers continue to weigh persistent inflation against signs of slowing economic growth. This marks the fourth consecutive meeting in which the central bank has opted for a “wait-and-see” approach.

Key Takeaways from the Fed’s Decision

• No Change in Rates: The Federal Open Market Committee (FOMC) unanimously voted to keep the federal funds rate steady, citing solid economic activity and a still-strong labor market, but also acknowledging that inflation remains above the 2% target.
• Future Rate Cuts Possible: The Fed’s updated “dot plot” suggests that two rate cuts are still possible by the end of 2025, though there is growing division among officials about the timing and necessity of such moves.
• Economic Projections: The Fed’s latest forecasts point to GDP growth of just 1.4% in 2024 and inflation running at 3%, with officials warning of stagflationary pressures as the economy faces headwinds from tariffs, global conflicts, and domestic policy uncertainty.
• Ongoing Risks: Policymakers highlighted risks from potential new tariffs, the Middle East crisis, and the administration’s fiscal proposals, all of which could influence future rate decisions.

Hours before the Fed’s announcement, President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell, whom he appointed during his previous term, and mused about taking over the central bank himself.

“Maybe I should go to the Fed,” Trump said at the White House on Wednesday. “Am I allowed to appoint myself at the Fed? I’d do a much better job than these people.”

Trump has repeatedly argued that Powell is “always behind the curve” and has blamed the central bank for not acting quickly enough to support the economy.

Many analysts credit Powell with steering the economy toward a potential soft landing. Powell has emphasized a data-driven, flexible approach, reassuring markets that rate cuts or hikes are not predetermined but will respond to evolving conditions. This has helped maintain investor confidence and avoid panic.

The labor market remains relatively strong, with unemployment around 4.2%–4.5%, and consumer spending, while moderating, has not collapsed.