The Federal Reserve has again left interest rates unchanged after the latest Fed meeting, leaving rates at 4.25% to 4.50%. It marks the fifth straight month that there has not been an interest rate cut or hike. President Donald Trump has been pressing hard for the Fed to cut rates, arguing that his tariff policy will not push up inflation. However, Fed Chair Jerome Powell and the central bank still see inflation as threatening enough to hold off any further cuts.
The decision comes amid increased economic uncertainty derived from the United States’ America-First tariff plan unveiling in early April. Subsequently, the Fed has opted to remain committed to a wait-and-see approach to handling the war on inflation and future interest rate cuts.
According to Treasury data, the annual inflation rate in the US accelerated for the second consecutive month to 2.7% in June 2025. This marks the highest level since February, up from 2.4% in May and in line with expectations. The rising inflation is a surefire sign that rates shouldn’t be cut just yet; however, the US President and his administration remain adamant that the economy is doing just fine and cuts should come. As a result, Trump has been publicly bashing Fed Chair Jerome Powell for the Fed’s stalling of cutting rates, even going as far as suggesting Powell should step down.
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The decision to leave interest rates unchanged will send ripples throughout the US Central Bank, with some suggesting that it could lead to Powell’s departure. Should Trump, who appointed Powell to the post during his first Presidency, decide to fire him, the replacement could spearhead several cuts before the year is over.