The Federal Reserve opted to keep interest rates steady during uncertain economic times, citing the unpredictability of tariffs imposed by President Trump. While job growth exceeded expectations and inflation decreased, the Fed remains cautious about the full effects of ongoing trade tensions. Fed Chair Jerome Powell indicated the central bank's intent to monitor the situation, while some economists predict that lower prices may not continue in the face of potential future tariffs. The decision aligns with market predictions and broader economic indicators amidst fluctuating trade relationships.
"That was nice, but don't get used to it," Greg McBride, Bankrate's chief financial analyst, told Business Insider in April, in response to the consumer price index in March falling to 2.4%, the lowest level in four years.
McBride added that "consumers, businesses, and even the Federal Reserve, are bracing for higher prices in the months ahead."
Fed Chair Jerome Powell in recent months has said the central bank is waiting to see how Trump's trade policies affect the economy.
The Federal Open Market Committee announced on May 7 that interest rates will remain at 4.25%-4.50%, in line with market predictions.
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