The Federal Reserve kept its fed funds rate steady at 4.25%-4.50% on Wednesday, a widely expected move that marks the third consecutive pause in interest-rate policy.
“Uncertainty about the economic outlook has increased further,” the Fed noted in its post-meeting statement.
The May meeting was the first since President Donald Trump‘s early April announcement of new trade tariffs.
The Federal Reserve noted that recent indicators point to continued solid growth in economic activity, while hinting that volatility in net exports has distorted the data, a reference to the negative GDP reading in the first quarter.
Yet, the Committee emphasized that “risks of higher unemployment and higher inflation have risen,” introducing this new language into the May policy statement.
The Fed reiterated its data-dependent stance, emphasizing that future policy …