The Federal Reserve has voted to hold interest rates at their current level in a blow to US President Donald Trump's fiscal agenda.
Earlier this afternoon, the central bank's Federal Open Market Committee (FOMC) opted to keep the US base rate unchanged at a range of 4.25 per cent and 4.5 per cent.
This move from the financial institution comes hours after Trump called Fed chair Jerome Powell "stupid" over his hawkish monetary policy.
Powell and colleagues at the Federal Reserve have been careful about cutting interest rates despite the Trump administration's interventions.
The Federal Reserve has opted to not cut interest rates despite Trump's pleas
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This careful approach is primarily due to fears over a looming rise in inflation, following the White House's sweeping implementation of tariffs on foreign imports.
Earlier today, Trump said: "Europe had 10 cuts, and we had none. And I guess he’s a political guy [Powell], I don’t know. He’s a political guy who’s not a smart person, but he’s costing the country a fortune.
"If he’s worried about inflation, that’s OK. I understand that. I don’t think there’s going to be any. So far there hasn’t
"But now we have a man that just refuses to lower the Fed rate, just refuses to do and he’s not a smart person. I don’t even think he’s that political. I think he hates me, but that’s OK."
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How have interest rates changed in the US?
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Despite the FOMC's refusal to cut interest rates at committee's latest meeting, its members continue to price in at least two more interest rate cuts by the end of 2025.
However, the central bank lowered its gross domestic product (GDP) forecast for 2025 to 1. 4 per cent and lifted its inflation projection to three per cent.
In a statement, the FOMC members wrote: "Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.
"The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.
Donald Trump has made tariffs the focus of his economic agenda REUTERSLATEST DEVELOPMENTS:
IN DEPTH: How could Trump's tariffs impact Britain? British exports to the US rankedGB NEWS"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
"Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate."
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