Fed keeps interest rates unchanged, sticks with forecast for 2 rate cuts in 2025

The Federal Reserve held interest rates steady Wednesday and kept its forecast for two cuts in 2025 as officials struggled to respond to the double-barreled threats spawned by President Donald Trump’s widening trade war – rising inflation and a slowing economy.

Although Trump recently slapped tariffs on many imports and unveiled plans for more aggressive duties in two weeks, the Fed’s decision underscores that it’s taking a wait-and-see approach as it assesses the scope, duration and impact of the fees.

"We think the right thing to do here is wait for greater clarity in terms of what the economy is doing," Fed Chair Jerome Powell said at a news conference. "It's really hard to know how this is going to work out."

The Fed also raised its 2025 inflation forecast while downgrading its economic growth outlook.

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