Investor caution dominated Wall Street this week, as escalating tensions between Israel and Iran fueled fears of potential U.S. involvement. Plus, the Federal Reserve’s decision to keep rates as is peeved President Donald Trump.
The Federal Reserve kept interest rates steady at 4.25%-4.5% for the fourth consecutive meeting, reaffirming its cautious stance.
Overall economic uncertainty has “diminished” since March, but the Fed warns that risks remain elevated. Policymakers maintain their median projection of two rate cuts in 2025, while trimming the 2026 outlook from three cuts to two — signaling a slightly more hawkish stance.
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Powell Defends The Decision
Federal Reserve Chair Jerome Powell defended the pause. He argues that while inflation has moderated, it is still too high to justify rate reductions. He cited new inflationary pressures stemming from tariffs tied to trade …