The Federal Reserve maintained interest rates at their target range of 4.25 percent to 4.5 percent Wednesday following the conclusion of its latest FOMC meeting.
The decision comes as the central bank balances economic data points and navigates uncertainty surrounding President Donald Trump's recent tariffs. Policymakers have kept rates unchanged since a reduction in December while evaluating the impact of trade actions.
Fed Chair Jerome Powell is expected to provide insight on the policy outlook and the central bank's perspective on the effects of tariffs during a press conference scheduled for 2:30 p.m. ET.
Economists and traders are listening for clues regarding the potential timing of future rate cuts. The economic picture shows mixed signals, including resilience indicated by April's payrolls alongside weakness seen in the latest gross domestic product report.
Market averages saw gains prior to the Fed's announcement. The S&P 500 index rose 0.46 percent, the Dow Industrials climbed 0.93 percent, and the Nasdaq Composite traded slightly above the flatline. Yields on government debt shifted modestly, with the U.S. 10-year yield down slightly near 4.287 percent and the rate on the 2-year note up slightly near 3.8 percent.
Consumer borrowing costs remain elevated. The rate on the 30-year fixed-rate mortgage stood around 6.9 percent last week, compared to 4.29 percent in March 2022 when the Fed began raising rates. Credit card rates are high, hovering around 20.12 percent recently. Savings rates, like the five-year annual percentage yield on certificates of deposit, are higher than in March 2022 but have decreased since late last year.
President Trump's trade actions have drawn attention to the Fed's policy challenges. The Fed previously indicated tariffs could pose a complex policy issue. The Federal Reserve held rates steady despite previous criticism from Trump regarding monetary policy. Jerome Powell has faced spotlight regarding his relationship with the president amid market fluctuations tied to tariff news.
