WASHINGTON–As expected, the Federal Reserve adjourned its meeting on Wednesday by leaving interest rates untouched for the third meeting in a row.

The unanimous decision to keep the Fed funds rate at a range between 4.25% to 4.5%, where it has been since December of 2023.

“Uncertainty about the economic outlook has increased further,” the Fed said in the statement announcing its decision, referring to President Trump’s tariffs. “The committee … judges that the risks of higher unemployment and higher inflation have risen.”

CU Response

“The FOMC made no changes to the fed funds rate target at its May meeting,” said Curt Long, chief economist with America’s Credit Unions. “During his press conference, Chair Powell conveyed the elevated level of uncertainty attached to the committee’s economic outlook and the need for the committee to be highly data dependent going forward. This suggests that the Fed will have a more reactive posture than normal and raises the risk that it may act too late to stabilize the economy should growth weaken. Regardless, credit unions will serve as positive, local sources of financial stability within their communities.” 

The Fed has been under pressure from Trump to cut rates, with the president at one point threatening to fire Fed Chairman Jerome Powell, before backing off the threat. 

“They’re in a bad situation,” William English, a former senior Fed adviser, told the Wall Street Journal. “If I were there, I would be suggesting that they stay put for now.”

Should the economy slow, many analysts are predicting a  reduction at the Fed’s next meeting, June 17-18, would not come as a surprise.