Fed Holds Rates Steady Amid Tariff Chaos | Powell On Inflation, Jobs & Trump’s Trade Policy

The U.S. Federal Reserve kept interest rates unchanged on May 7, 2025, but warned of rising risks to inflation and unemployment, fuelled by Trump’s tariff policies. Fed Chair Jerome Powell, speaking post-FOMC meeting, called the economy “solid” yet stressed the need for nimble policy to tackle trade-driven uncertainty. With tariffs threatening higher inflation and slower growth, the Fed is in a wait-and-see mode, ready to pivot based on jobs or inflation trends. A weaker job market could push rate cuts, while persistent inflation may keep policy tight. This report dives into Powell’s cautious outlook and the Fed’s struggle to balance risks.