Overview

• The Federal Reserve kept its target interest rate unchanged at 4.25%-4.50% during its May 7 meeting, marking the third consecutive pause since late 2024 cuts.
• Officials noted that inflation remains above the 2% target, while unemployment remains low despite recent GDP contraction driven by one-time import factors.
• Fed Chair Jerome Powell emphasized the central bank's commitment to data-driven decisions, stating political pressure does not influence monetary policy.
• President Trump criticized Powell, calling him a 'fool' and blaming him for not lowering rates, while reportedly keeping Powell in place as a potential scapegoat for economic challenges.
• The Fed highlighted growing uncertainty in the economic outlook, including risks from recent tariff policies that could complicate inflation and employment goals.