Fed Holds Steady Amid Economic Uncertainty

The Federal Reserve maintained interest rates, citing rising risks of inflation and unemployment due to tariff policies. Despite economic expansion, uncertainties persist, leading Fed Chair Jerome Powell to stress a nimble monetary stance. Markets fluctuated post-announcement, highlighting the Fed's challenge in balancing these risks.

The Federal Reserve announced on Wednesday that it will keep interest rates unchanged, highlighting increased risks of inflation and unemployment due to current tariff policies. This decision arrives as the central bank navigates a complex economic landscape, complicated further by the policies of the Trump administration.

The Fed's statement described the economy as continuing to grow at a solid pace, notwithstanding a first-quarter dip attributed to record imports spurred by impending import tax hikes. The labor market remains robust, while inflation levels are slightly high, according to the Federal Open Market Committee (FOMC).

Chair Jerome Powell acknowledged the economic uncertainties and maintained that the Fed's existing monetary policy stance allows for quick adjustments if necessary. Stock markets initially reacted positively but later declined. Analysts indicate a weaker job market could prompt rate cuts, while rising inflation could keep policies tight.

(With inputs from agencies.)