Fed Keeps Rates Unchanged, Cites Risk of Higher Unemployment, Inflation 

The Federal Open Market Committee (FOMC) maintained its policy interest rate at 4.25%–4.50% on Wednesday, keeping rates unchanged since December, when the central bank last reduced borrowing costs. 

The Federal Reserve has adopted a more pessimistic stance on the economy, even as it continues to characterize the labor market as “solid.” In its revised policy statement, the Fed noted that uncertainty about the economic outlook has “increased further” and warned that “the risks of higher unemployment and higher inflation have risen.” 

The Fed convened as the U.S. economy presents mixed signals, with GDP unexpectedly contracting in the first quarter, while April job growth exceeded expectations. Meanwhile, Wall Street economists are increasing their recession risk forecasts, citing the impact of the administration’s tariffs on economic stability. 

Further information and perspective to be sent shortly.