WASHINGTON, June 19 (AFP): The US Federal Reserve held interest rates steady for a fourth consecutive meeting Wednesday, forecasting higher inflation and cooler growth this year as President Donald Trump's tariffs begin to take hold and geopolitical uncertainty swirls.
Fed Chair Jerome Powell told reporters the central bank would make better decisions if it waited a few months to understand how tariffs impact inflation, spending and hiring, in a sign that the next rate adjustment could take some time to materialize.
For now, he expects to learn more "over the summer," while officials appear increasingly divided on whether they can cut interest rates at all in 2025.
The Fed kept the benchmark lending rate at a range between 4.25 per cent and 4.50 per cent at the end of its two-day meeting, with officials penciling in two rate reductions this year, similar to earlier projections.
But there was growing divergence among Fed officials participating in the meeting, with a smaller majority expecting the central bank to lower rates at least twice.
The Fed's decision drew the ire of Trump, who has repeatedly pressured the independent central bank for rate cuts. He wrote on his Truth Social platform that Powell was "the WORST" and a "real dummy, who's costing America $Billions!".
Hours before the meeting, he had told reporters at the White House that "We have a stupid person, frankly, at the Fed."
"We have no inflation, we have only success, and I'd like to see interest rates get down," he added. "Maybe I should go to the Fed. Am I allowed to appoint myself?"
The Fed said in a statement earlier that "uncertainty about the economic outlook has diminished but remains elevated."
The central bank also cut its expectations for economic growth this year and raised its inflation and unemployment forecasts, in its first updated projections since Trump in April unleashed sweeping 10 per cent tariffs on almost all trading partners.
"Increases in tariffs this year are likely to push up prices and weigh on economic activity," Powell said.
Avoiding a more persistent impact depends on the size of levies' effects, how long it takes for them to pass through to prices, and keeping expectations anchored, he added.
