US Fed Holds Rates Steady, Highlights Elevated Risks of Unemployment and Inflation

Published: May 8, 2025 11:59

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["[US Fed Maintains Status Quo, Highlights Rising Risks of Unemployment and Inflation] The US Fed kept interest rates unchanged for the third consecutive meeting, emphasizing that it sees increased risks of both rising inflation and unemployment. The FOMC committee stated, 'Uncertainties about the economic outlook have increased further. The Committee is monitoring risks to its dual mandate in both directions and judges that risks of both high unemployment and high inflation have risen.' Officials unanimously voted to maintain interest rates within the 4.25%-4.5% range. The US Fed indicated that it would continue to reduce its balance sheet at the pace announced at the March meeting. Trump's trade policies have sparked a wave of uncertainty throughout the economy. Although tariffs are still under negotiation, economists generally expect that comprehensive tariffs will drive up inflation and drag down economic growth. This will create an imbalance between the two objectives of policymakers (price stability and maximum employment)."]

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