Federal Reserve Holds Interest Rates, Downgrades Economic Outlook

The Fed cites uncertainty from President Trump's policies and plans two rate cuts later this year to address inflation and slowing growth.

The Federal Reserve has kept interest rates steady, maintaining a range of 4.25% to 4.50%, due to economic uncertainty and conflicting signals.
Economic forecasts were downgraded, with GDP growth now projected at 1.7% (down from 2.1%), inflation at 2.7% (up from 2.5%), and unemployment at 4.4% (up from 4.3%).
Two rate cuts of 0.25% each are planned for later this year as the Fed balances inflation control with signs of economic slowdown.
The Fed highlighted uncertainty stemming from President Trump's economic policies, including tariffs and federal spending cuts, as a significant factor in its cautious approach.
President Trump has publicly pressured the Fed to lower rates further, drawing criticism from economists and underscoring tensions with the independent institution.