Fed holds rates amid rising economic uncertainty over tariff policies, inflation risks

As widely expected, the U.S. Federal Reserve decided to leave its interest rates unchanged, citing economic uncertainty and rising inflation.

It's the third consecutive freeze since Trump took office, despite ongoing pressure for cuts.

Shin Se-byuck reports.

The Federal Reserve held interest rates steady at 4-point-2-5 to 4-point-5-0 percent on Wednesday, amid growing economic uncertainty fueled by U.S. tariff policies.

Fed Chair Jerome Powell cited slowing job growth and rising inflation as key reasons for the freeze.

"The risks of higher unemployment and higher inflation appear to have risen."

The Fed also pointed to the economic uncertainties surrounding the White House's tariff policies.

"The tariff increases announced so far have been significantly larger than anticipated. their effects on the economy remain highly uncertain."

Powell further emphasized that the inflationary impact of these tariffs could vary widely, depending on their duration and scope.

This marks the central bank's third consecutive rate freeze since President Donald Trump took office in January, with each Federal Open Market Committee meeting so far opting against a rate hike.

Trump has repeatedly pressured the Fed to cut rates, arguing that his tariff strategy should not lead to economic slowdown or higher consumer prices.

Despite this, Powell says the central bank's decisions remain independent.

He stressed that the Fed will continue to focus on maximum employment and price stability.

As for the timing of potential rate cuts, Powell avoided a direct answer.

He said the Fed will "wait and see how things evolve" before deciding on its next monetary policy steps.

The Fed's latest decision leaves the U.S.-South Korea interest rate gap unchanged at 1-point-7-5 percentage points, based on the upper end of each country's benchmark rates,

with Korea's current rate at 2-point-7-5 percent.

Shin Se-byuck, Arirang News.