The Fed Stands Pat: No Rate Changes Amid Trump's Tariff Turmoil
Federal Reserve announces decision on interest rates in the United States. - Fed reserves unveil result of strategic deliberation
Here's the scoop:
Over the past few months, the US central bank, the Fed, has been in a wait-and-see mode. They've got their eyes on the impact of Trump's trade wars on our economy, trying to gauge the long-term consequences on inflation and employment. Trump has been a persistent voice, urging the Fed to slash interest rates by a whole percentage point. But the Fed's independence from politics is a cornerstone of its operation.
Now, let's dive a bit deeper:
The Fed's key interest rate has stayed put at a range of 4.25% to 4.5% following its June 18, 2025 meeting. This makes it the fourth time in a row that the rate has remained unchanged[1][3]. This conservative stance comes amidst a cloud of economic uncertainty surrounding Trump's tariffs and the general outlook[2].
Since Trump took office, the Fed has been hesitant to lower the rates, mainly because of the uncertainty involving the economic consequences of the tariffs. Despite whispers and demands from Trump to lower interest rates, especially after a lull in job creation in May, the Fed is sticking to its guns, keeping a close eye on inflation and job market data[2].
Inflation has given a slight nudge, going from 2.3% in April to 2.4% in May. Employment-wise, the job market remains strong, with employment numbers exceeding expectations. Fed officials have shared that they're in no rush to alter the policy, preferring to observe how Trump's economic policies, like the tariffs, unfold before making any decisions on interest rates[2].
In a nutshell, the Fed hasn't made any adjustments to interest rates due to Trump's tariffs, but they're keeping the rates steady to assess the ongoing effects of the tariffs on inflation and employment in the US economy[1][2][3].
The Fed, led by its decision-makers, chose not to alter interest rates following President Donald Trump's tariff turmoil, with the rates remaining at a range of 4.25% to 4.5%. This decision was influenced by the uncertainty in business, finance, politics, and general-news sectors due to Trump's economic policies.
