The move was in line with market expectations. One prediction algorithm based on future contract prices put the probability of a hold at about 98 percent just prior to Wednesday’s announcement.
Fed officials had also emphasized the sturdiness of the domestic economy and the uncertainty driven by Trump’s tariffs, along with how they complicated plans for future rate cuts.
“The labor market is sold, inflation is low. We can afford to be patient as things unfold. There’s no real cost to our waiting at this point,” Fed Chair Jerome Powell said.
“There’s a great deal of uncertainty about … where tariff policies are going to settle out and also, when they do settle out, what will be the implications for the economy, for growth and for employment,” he added.
Trump has been calling on the Fed and Powell to lower interest rates and has raised the pressure as his trade war with China drags on.
To date, the U.S. has had no trade meetings with China, its main rival in the trade war. China and the U.S. have put triple-digit tariffs on each other, leading to a major slowdown in commercial activity between the two countries.
The Hill’s Tobias Burns has more here.
