Fed Holds Rates Amid Trump Tariff Pressure

The US Federal Reserve has held its key interest rate steady at 4.25% to 4.5% for the third consecutive meeting, despite direct pressure from President Donald Trump to lower rates amid his administration's new tariffs. The Fed highlighted increased risks of both inflation and unemployment, linking them to uncertainty from recent trade policies and ongoing market volatility. New data shows a contraction in US GDP for the first quarter, with inflation remaining above the Fed’s 2% target and unemployment rates near historic lows. Economists warn that Trump's tariffs are causing the unusual combination of rising prices and potential job losses, complicating the Fed's efforts to balance inflation control and employment. The central bank signaled that rate cuts are unlikely in the near term and will rely on further economic developments. Financial markets responded cautiously, awaiting more data on jobs and inflation.