The Federal Reserve paused its series of interest rate cuts in January, ending three consecutive quarterly reductions. The central bank on Wednesday cited ongoing economic uncertainty, particularly in the labor market and inflation, as the reason for holding rates at between 3.5 and 3.75 percent.
"Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated," the committee's press release states. "The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated."
Jerome Powell, the chair of the Federal Reserve, noted during the press conference that although the labor market has stabilized over the last few months it has shown signs of slowing with an average decline of 22,000 jobs per month.
He also argued that inflation continues to remain elevated, noting that those "elevated readings largely reflect inflation in the goods sector, which has been boosted by the effects of tariffs." He said the opposite is seen in markets not affected by tariffs, specifically the services sector, which is experiencing disinflation.
President Trump blasted the Fed's decision.
"Jerome 'Too Late' Powell again refused to cut interest rates, even though he has absolutely no reason to keep them so high," President Trump wrote on Truth Social, Thursday. "He is hurting our Country, and its National Security. We should have a substantially lower rate now that even this moron admits inflation is no longer a problem or threat. He is costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for interest expense. Because of the vast amounts of money flowing into our Country because of Tariffs, we should be paying the lowest interest rate of any country in the world."
The Fed should substantially lower interest rates, NOW! Tariffs have made America strong and powerful again, far stronger and more powerful than any other Nation. Commensurate with this strength, both financial and otherwise, WE SHOULD BE PAYING LOWER INTEREST RATES THAN ANY OTHER COUNTRY IN THE WORLD! Thank you for your attention to this matter.