Wed, 18 Jun 2025

Wed, 18 Jun 2025 Fed holds interest rates for fourth time despite tariff turmoil

The US central bank leaves its key interest rate unchanged at 4.3%, as its view of the economy darkens.

* The US Federal Reserve has kept its key interest rate unchanged at 4.3% for the fourth time in a row.
* Despite forecasts suggesting slower growth, higher unemployment and faster inflation than previously expected, Fed officials have decided not to cut borrowing costs.
* President Donald Trump has repeatedly called on the Fed to cut interest rates, but Fed officials are wary of a one-time jump in prices due to tariffs potentially turning into a persistent problem.
* Inflation remains above the Fed's 2% target at 2.4%, and Fed Chairman Jerome Powell expects prices to rise more quickly as firms pass on tariff costs to customers.
* The economy overall is considered "solid" with low unemployment, but forecasts suggest growth will slow to 1.4% this year from 2.5% last year.
* Projections also expect inflation of roughly 3% and a slight increase in the unemployment rate to 4.5%.
* The outlook for interest rate cuts in 2025 remains unchanged, with most Fed members expecting rates to drop just below 4% by the end of the year.
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