Fed Holds Steady on Rates While Trimming Economic Growth Forecast

The Federal Reserve kept interest rates steady at 4.25%-4.5% during its closely watched meeting on Wednesday, where they’ve remained since December. Despite holding rates constant, the Fed still anticipates implementing two rate cuts before year’s end.

The decision comes as officials express concerns about tariffs’ impact on an already slowing economy. The Federal Open Market Committee has downgraded its economic growth outlook to just 1.7% for this year—a 0.4 percentage point reduction from December’s projection—while simultaneously raising its inflation forecast.

Additionally, the Fed announced it would further scale back its “quantitative tightening” program, slowing the pace at which it’s reducing the bonds held on its balance sheet.