WASHINGTON, United States — The US Federal Reserve paused interest rate cuts again on Wednesday and warned of increased economic uncertainty as it seeks to navigate an economy unnerved by
States — The US Federal Reserve paused interest rate cuts again on Wednesday and warned of increased economic uncertainty as it seeks to navigate an economy unnerved by President Donald Trump’s stop-start tariff rollout.
Policymakers voted to hold the US central bank’s key lending rate at between 4.25 percent and 4.5 percent, the Fed announced in a statement.
They also cut their growth forecast for 2025 and hiked their inflation outlook, while still penciling in two rate cuts this year — in line with their previous forecast in December.
“Uncertainty today is unusually elevated,” Fed chair Jerome Powell told reporters after the US central bank’s decision was published, adding that at least part of a recent rise in inflation was down to tariffs.
All three major Wall Street indices closed higher on the news, while government bond yields fell after the Fed announced it would slow down the rate at which it is reducing its balance sheet, which swelled during the pandemic.
In an unusual move, Fed governor Christopher Waller opposed the Fed’s rate decision because of his colleagues’ support for slowing down the pace at which it is shrinking the balance sheet.
