Fed Keeps Rates Unchanged; Cites Risk of Higher Unemployment, Inflation

The Federal Open Market Committee (FOMC) maintained its policy interest rate at 4.25%–4.50% on Wednesday, keeping rates unchanged since December, when the central bank last reduced borrowing costs.

The Federal Reserve has adopted a more pessimistic stance on the economy, even as it continues to characterize the labor market as “solid.” In its revised policy statement, the Fed noted that uncertainty about the economic outlook has “increased further” and warned that “the risks of higher unemployment and higher inflation have risen.”

The Fed convened as the U.S. economy presents mixed signals, with GDP unexpectedly contracting in the first quarter, while April job growth exceeded expectations. Meanwhile, Wall Street economists are increasing their recession risk forecasts, citing the impact of the administration’s tariffs on economic stability.

Further information and perspective to be sent shortly.

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https://www.federalreserve.gov/

About Joe Palmisano

Joe Palmisano is editorial director of Connect Money, where he oversees daily coverage of alternative assets, direct investments, financial advisory and the economy. He brings three decades of experience as a financial journalist, analyst and portfolio manager. Before joining Connect Money, Palmisano wrote for The Wall Street Journal, covering foreign exchange, global fixed-income and equity markets. He later served as a senior research analyst and portfolio manager, producing market analysis and managing foreign exchange and U.S. equity portfolios for FX Concepts. His work has also appeared in SFO Magazine and CMT Association publications. Palmisano earned a bachelor’s degree in finance from The American University and holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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