Despite the insistent demands of President Donald Trump to reduce types as soon as possible, the Fed does not yield and Opt for the «pause mode» unanimously. Thus, at its meeting today, May 7, 2025, the United States Federal Reserve has decided Keep interest rates in the range of 4.25% to 4.5%. The Pause today happens to those already decreed last January and Marchas well as at the three consecutive declines initiated in September, when the price of money was cut for the first time since March 2020.
Moments after knowing the decision, The Wall Street market has barely moved. If in the opening of the bag today the three American indices opened the session with slight increases (the Dow Jones rose 0.37, the S&P 500 advanced 0.13% and the Nasdaq added 0.12%), t tThe Fed statement the Dow Jones rose 0.62% in the 41,077 points, the S&P 500 earned 0.10% and the Nasdaq left 0.32%.
Powell, attentive to tariffs
In the subsequent press conference, Powell has indicated that the Federal Reserve is attentive to the inflationary risks derived from tariffs and the evolution of economic growth. Although the above projections indicated possible rate cuts for the end of the year, Powell avoided committing to a specific calendar, highlighting the dependence on future economic data.
«The US economy is resilient and solid. So we can wait and see. We can be patients. We are not in a hurry, «he said.
However, Powell has pointed out that “my instinct tells me that Uncertainty in the economy is very high”. «The US is negotiating with many countries in tariff politics. And there are many doubts in this matter: Amount of tariffs, their time, scope … «. So, for now,» the right decision is to wait and see. We will move quickly when necessary. Now the economic situation has nothing to do with that of 2019 «.
«The unemployment rate remains low and the labor market is at the maximum level of employment or close to it,» he acknowledged. «Inflation has decreased considerably, although it has remained slightly above the current objective, or even above 2%, which supports our goals.»
Before the Ask about whether the recent pressures of former president Donald Trump to cut types affected his workPowell settled the matter firmly: «It does not affect our work at all. We will always consider only economic data, perspectives and risk balance. And that is all.»
The Fed puts space against Trump and prioritizes economic data
With today’s «stop» in monetary policy, Jerome Powell leaves more than crystalline independent paper and the prudent position of the Fed, emphasizing that monetary policy decisions should be based on economic data and not on political considerations.
«Although net exports oscillations have affected the data, recent indicators suggest that Economic activity has continued to grow at a solid pace. The unemployment rate has stabilized at a low level in recent months and Labor market conditions remain solid. Inflation is still somewhat high«The institution has summarized in its press release.
Also, in its statement, the entity has stressed that Uncertainty about economic perspectives «has increased even more», so the governing body of the Central Bank will continue «pending» of the risks that weigh on employment and inflation. «The Committee will be willing to adjust the orientation of monetary policy as appropriate if risks arise that may hinder the achievement of their objectives. Its evaluations will consider a wide range of information, including data on labor market conditions, inflationary pressures and expectations, and financial and international evolution,» says the note.
And is that the American economy presents mixed signals: while the Gross Domestic Product (GDP) fell unexpectedly in the first quarter, the labor market He showed strength with the creation of 177,000 jobs in April and an stable unemployment rate at 4.2%. This duality complicates the work of the Fed, which must balance the control of inflation with the promotion of employment. In addition, 145% tariffs imposed by the Trump administration to Chinese imports have generated concerns about a possible increase in inflation and a slowdown in economic growth. This situation places the Fed in a difficult position, since reducing rates could stimulate the economy but also exacerbate inflationary pressures.
At the moment, the Personal Consumer Expenditure Price IndexFed preferred statistics to monitor inflation, stood in March at 2.3%, two tenths less. The monthly rate recorded a stagnation, this is four tenths less. The underlying variable closed by 2.6% year -on -year, two tenths less.