Officials at America’s central bank on Wednesday chose not to change federal interest rates, leaving borrowing costs in the range of 4.25% to 4.5%. However, most officials expect the bank will make two rate cuts by the end of the year.

Federal Reserve Chair Jerome Powell said that tariff policies are introducing unusual levels of uncertainty into the market, contributing to the decision to hold steady.

After their two-day meeting, Federal Reserve officials also released economic projections forecasting that inflation rates will remain about the same in the near term, but will drop over the next two years to the Fed’s goal of 2%.

What else did Powell say about the economy? The labor market remains solid with wages growing faster than inflation, the Fed chairman said. Consumer spending has slackened compared to the second half of 2024, he said. Powell also said that while the odds of a recession have slightly increased, overall it remains unlikely.

How did President Donald Trump respond to the Fed’s decision? Trump said the right thing to do would be to cut rates and that tariffs would ease into the economy. He continued to push his upcoming plan for reciprocal tariffs on all nations, which is expected to take effect on April 2.

This story originally appeared in WORLD. © 2025, reprinted with permission. All rights reserved.