The decision comes after mounting pressure from US President Donald Trump for the Fed to lower rates
The US Federal Reserve announced their decision Wednesday to keep rates steady, holding at the 3.50 per cent to 3.75 per cent range.
“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” read the statement from the Fed.
This decision follows increasing pressure from US President Donald Trump urging the Fed to cut rates, alongside an ongoing federal criminal probe into Fed Chair Jerome Powell. The investigation has intensified an unprecedented confrontation between the nation's leading central banker and the administration, which has been pushing for substantial interest rate reductions.
Fed policymakers have indicated they will take a data-dependent approach, evaluating conditions at each meeting before deciding on their next steps. This follows three rate reductions during the latter half of 2025.
Recent Federal Open Market Committee sessions have been marked by disagreement among members regarding the outlook for both inflation and employment. This divide was evident in December, when officials cast dissenting votes on the Fed's quarter-point rate cut from opposing perspectives.
Additionally, during their December gathering, policymakers forecasted only a single rate reduction for 2026.
“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals,” said the central bank.
