The US Federal Reserve kept interest rates unchanged on Wednesday, signaling confidence in the economy’s underlying momentum while resisting growing political pressure to ease policy.
Fed Chairman Jerome Powell said available indicators point to economic activity expanding at a “solid pace,” even as the labor market cools. Job gains have slowed, the unemployment rate has shown signs of stabilization, and inflation—though well below its peak—remains “somewhat elevated.”
Against that backdrop, the Federal Open Market Committee voted to maintain the target range for the federal funds rate at 3.5 percent to 3.75 percent, choosing patience over preemption as it weighs the next phase of policy.
The decision comes amid renewed pressure from President Donald Trump, who has publicly urged the central bank to cut interest rates to boost growth. Adding to the political backdrop, the U.S. Department of Justice has recently intensified its probe into Powell’s congressional testimony related to renovation costs at the Federal Reserve’s headquarters—an issue the Fed has said is administrative and unrelated to monetary policy.
Powell reiterated that the central bank remains focused on its dual mandate: maximum employment and inflation returning to its 2 percent target over the longer run. “Uncertainty about the economic outlook remains elevated,” he said, noting that policymakers are closely monitoring risks on both sides of that mandate.
The Fed again emphasized that future moves will depend on incoming data, the evolving outlook, and the balance of risks. Policymakers will continue to assess labor market conditions, inflation pressures and expectations, as well as financial and international developments.
The message to markets was measured but firm. The Fed appears comfortable holding rates steady while inflation remains sticky, even as political noise grows louder. For now, Powell and his colleagues are signaling that data—not pressure—will determine when rates finally move again.
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