Federal Reserve Keeps Interest Rates Steady Amid Economic Concerns
Federal Reserve Keeps Interest Rates Steady Amid Economic Concerns

Federal Reserve Keeps Interest Rates Steady Amid Economic Concerns

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The Federal Reserve decided to keep its benchmark interest rate steady at 4.25%-4.50%, citing increased risks of both higher unemployment and inflation amid ongoing economic uncertainties. Policymakers emphasized a cautious, 'wait-and-see' approach, particularly given the challenges posed by recent U.S. tariff policies and concerns about potential stagflation—rising prices alongside slower growth. Despite President Trump's calls for a rate cut, the Fed remains focused on balancing its dual mandate of maximum employment and stable inflation, stating it is not in a hurry to lower rates. Following the announcement, Wall Street indices closed higher, while Asian and Indian markets reacted with caution, reflecting global sensitivity to Fed decisions. Market participants are watching closely for future Fed signals, as current pricing suggests little expectation of a rate cut in the near term, though odds rise for later in the year. The Fed reaffirmed its commitment to data-driven policy adjustments and ongoing reductions in its securities holdings.

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