Overview

• The Fed left its benchmark rate at 4.25%–4.50% for the fourth straight meeting, citing uncertainty over the inflationary impact of new tariffs
• New projections show inflation heading toward 3% this year and staying above the 2% target through 2026 while GDP growth forecasts were cut to 1.4%
• President Trump intensified his feud with Chair Jerome Powell by calling for deep rate cuts and labeling him “one of the dumbest” people in government
• Other major central banks, including the European Central Bank, have continued to lower borrowing costs, widening the policy gap with the U.S. central bank
• Economists warn that sustained tariff-driven price shocks could entrench inflation or even trigger stagflation if consumer costs and wage pressures persist