PULSE POINTS:
❓What Happened: The Federal Reserve maintained its key interest rate at 4.3 percent, resisting pressure to lower it.
👥 Who’s Involved: The Federal Reserve, President Donald J. Trump, and U.S. Federal Reserve Chairman Jerome Powell.
📍 Where & When: Washington, D.C., during the Fed’s Federal Open Market Committee (FOMC) on May 7, 2025.
💬 Key Quote: “In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent,” the FOMC statement reads.
⚠️ Impact: The decision reflects concerns over rising inflation and unemployment, exacerbated by economic uncertainty from tariffs.
IN FULL:
The Federal Reserve has chosen to keep its key interest rate steady at 4.3 percent, despite calls from President Donald J. Trump to lower borrowing costs. This decision, announced on Wednesday, marks the third consecutive meeting where rates have remained unchanged after a series of cuts late last year, when then-Vice President Kamala Harris was seeking to succeed then-President Joe Biden. The Fed’s statement claimed increased uncertainty about the economic outlook, noting heightened risks of both inflation and unemployment.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen,” the Federal Reserve’s Federal Open Market Committee statement reads. It adds: “In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.”
In recent months, President Trump has increased pressure on the central bank to cut interest rates to increase domestic economic liquidity as his tariff policies reduce foreign imports. Late last month, the America First leader posted on Truth Social, urging Federal Reserve Chairman Jerome Powell to lower borrowing rates: “‘Preemptive Cuts’ in Interest Rates are being called for by many… With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already ‘lowered’ seven times.”
Earlier in April, Trump accused Powell of playing politics by refusing to cut rates, leading to a push by the White House to see Powell removed as the central bank’s chairman.