WASHINGTON—The Federal Reserve kept its key interest rate unchanged on Wednesday and offered no indication of a rate cut in the near future, as President Donald Trump's tariffs increase the risk of both a surge in inflation and a potential recession.
However, officials signaled rising concern about both threats.
The decision keeps the Fed’s benchmark short-term interest rate steady at a range of 4.25% to 4.5% for the third consecutive meeting.
"The FOMC made no changes to the fed funds rate target at its May meeting,” noted America's Credit Unions Chief Economist Curt Long. “During his press conference, Chair Powell conveyed the elevated level of uncertainty attached to the committee’s economic outlook and the need for the committee to be highly data dependent going forward. This suggests that the Fed will have a more reactive posture than normal and raises the risk that it may act too late to stabilize the economy should growth weaken. Regardless, credit unions will serve as positive, local sources of financial stability within their communities."