Federal Reserve Holds Rates Steady as ECB Cuts for Fifth Time

The Fed resists pressure from President Trump to lower rates, while the ECB reduces its key rate to 2.75% to support a struggling Eurozone economy.

The Federal Reserve maintained its interest rate range at 4.25–4.5%, defying calls from President Trump for cuts to stimulate the U.S. economy.
President Trump criticized the Fed, claiming it failed to address inflation effectively, despite economists supporting the Fed's cautious stance to preserve monetary credibility.
The European Central Bank reduced its key deposit rate by 0.25 percentage points to 2.75%, marking its fifth cut since mid-2024 to bolster the weakening Eurozone economy.
Economists predict the ECB may continue rate reductions, as Eurozone growth remains weak and inflation is projected to stabilize near the 2% target.
The divergence in monetary policy between the Fed and ECB could impact currency values, potentially benefiting European exporters by making their goods cheaper in the U.S. market.