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The Federal Reserve held interest rates steady Wednesday for the third meeting in a row, defying President Trump's calls for the central bank to again loosen monetary policy while also warning of increased economic uncertainty.
Fed Chair Jerome Powell in his afternoon press conference made it clear the central bank would take its time in the months ahead, saying the Fed does not "need to be in a hurry" as it evaluates how Trump's tariffs will affect employment and inflation and whether talks with America's largest trading partners change the outlook.
"I don't think we can say which way this will shake out," he told reporters.
Nevertheless, Powell made it clear he is concerned about the effect Trump's tariffs could have: "My gut tells me that uncertainty for the path of the economy is extremely elevated."
Read more: The latest news and updates on Trump's tariffs
Policymakers voted unanimously to maintain the Fed's benchmark interest rate in the range of 4.25% to 4.5%, a mark reached at the end of 2024 after cutting rates by a full percentage point last fall.
Fed officials noted in a statement that uncertainty about the economic outlook has "increased further," but said the economy has continued to expand at a "solid pace" despite swings in net exports that affected data during the first months of 2025.
A GDP report covering the first quarter recently showed the US economy contracted for the first time in three years due largely to a rush by importers to beat the start of Trump's tariffs.
Fed officials on Wednesday also expressed concern that "risks of higher unemployment and inflation have risen," but that at the moment policymakers view the job market as "solid," noting that the unemployment rate has stabilized at a low level in recent months.
An April jobs report released Friday showed that the labor market remained resilient even in the weeks after Trump's "Liberation Day" announcements shook markets.
The decision to hold rates steady on Wednesday came after a public campaign by President Trump in recent weeks to urge the Fed and Powell to cut rates as his administration rolls out a series of aggressive tariffs on goods imported from major trading partners.
Read more: How much control does the president have over the Fed and interest rates?
In doing so, the president also lobbed a series of insults at Powell, calling him a "total stiff" and a "major loser" while accusing him of being late to act.