The U.S. Federal Reserve is widely expected to hold interest rates steady at its policy meeting on Wednesday, as signs of easing inflation and continued job growth clash with increasing pressure from President Donald Trump to slash rates amid the first economic contraction in three years.
Trump has intensified his public attacks on Fed Chair Jerome Powell, blaming him for failing to act swiftly as economic risks mount. The president’s criticism has grown louder following recent data showing a 0.3% year-on-year GDP contraction in the first quarter and signs of weakening labor market momentum.
Despite mounting political pressure, analysts expect the Fed to keep the federal funds rate unchanged at 4.25%–4.5%, emphasizing a cautious approach as it weighs mixed economic indicators.
Inflation data released by the U.S. Labor Department showed the Consumer Price Index (CPI) declined 0.1% in March, the first monthly drop since May 2020, bringing annual inflation down to 2.4%, the lowest since September 2024. The Producer Price Index (PPI) also fell by 0.4% month-on-month in March, with a 12-month increase of 2.7%. The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, remained flat monthly and eased to 2.6% annually, down from 3% in February.
While inflation cools, the economy showed signs of slowing. The trade deficit reached a record $162 billion in March, driven by a surge in imports that weighed on domestic output. Labor data painted a mixed picture. Non-farm payrolls rose by 177,000 in April, slightly above expectations, but private-sector hiring disappointed, rising just 62,000. The unemployment rate held steady at 4.2%, while initial jobless claims rose to 241,000, the highest in nine weeks.
In response to these developments, Trump ramped up his criticism of Powell. On April 7, he wrote on social media: “Now is a PERFECT time to cut rates,” accusing Powell of being “always late.” On April 17, he added: “Jerome Powell of the Fed, who is always TOO LATE AND WRONG… issued a report which was another, and typical, complete ‘mess!’” Days later, he claimed Powell’s actions could trigger a deeper slowdown.
Although markets were rattled by the escalating tension, Trump softened his tone on April 23, denying any plans to remove Powell despite calling him a “major loser” earlier. Nevertheless, he renewed calls for rate cuts following the release of April’s labor data.
The Federal Reserve, meanwhile, has signaled that while inflation is moving toward its 2% target, the labor market’s underlying strength and geopolitical uncertainties argue for caution. The central bank’s statement on Wednesday is expected to acknowledge recent progress on inflation but stop short of signaling any imminent rate cuts.
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The U.S. Federal Reserve kept its benchmark federal funds rate unchanged on Wednesday, maintaining the target range at 4.25% to 4.50%, in a widely expected move as the central bank navigates a complex economic environment marked by slowing inflation, global trade tensions, and political pressure.
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The Federal Reserve is widely expected to keep interest rates unchanged at Wednesday’s meeting.
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A 61-year-old man in Alaska rescued after being trapped facedown under a massive 700-pound boulder in a freezing glacier-fed creek for three hours.
Two foreign nationals were indicted Friday in California and Wisconsin for allegedly trying to smuggle sensitive U.S. military technology to China and target an American dissident critical of Beijing.
The Federal Aviation Administration has ordered an accident investigation into SpaceX’s latest Starship test flight, which ended with the spacecraft spinning out of control and breaking apart over the Indian Ocean.
Czech Justice Minister Pavel Blažek resigned Friday after opposition parties called for his removal over a controversy involving bitcoins donated to the Ministry of Justice.
The Centers for Disease Control and Prevention (CDC) confirmed Friday that COVID-19 vaccines are still recommended for healthy children aged 6 months and older—if their doctors agree.
A 61-year-old man in Alaska rescued after being trapped facedown under a massive 700-pound boulder in a freezing glacier-fed creek for three hours.
Two foreign nationals were indicted Friday in California and Wisconsin for allegedly trying to smuggle sensitive U.S. military technology to China and target an American dissident critical of Beijing.
The Federal Aviation Administration has ordered an accident investigation into SpaceX’s latest Starship test flight, which ended with the spacecraft spinning out of control and breaking apart over the Indian Ocean.
Czech Justice Minister Pavel Blažek resigned Friday after opposition parties called for his removal over a controversy involving bitcoins donated to the Ministry of Justice.
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