United States Interest Rate

The Federal Reserve kept the funds rate at 4.25%–4.50% for a third consecutive meeting in May 2025, in line with expectations, as officials adopt a wait-and-see approach amid concerns that President Trump’s tariffs could drive up inflation and slow economic growth. Policymakers noted that uncertainty about the economic outlook has increased further and that the risks of higher unemployment and higher inflation have risen. During the regular press conference, Fed Chair Powell said that it's too early to determine whether inflation or unemployment will emerge as the greater concern, and the Fed does not need to rush into adjusting interest rates. The central bank can afford to be patient, monitoring incoming data and adopting a wait-and-see approach. The Fed also said that that although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.