United States: Fed maintains interest rates

The US Federal Reserve ( Fed ) unsurprisingly left rates unchanged on Wednesday, a decision taken unanimously and for the fourth time in a row, a prolonged status quo that has increased President Donald Trump's frustration with it. In a decision widely anticipated by the markets, central bankers kept rates in a range of between 4.25% and 4.50%.

"Uncertainty about the economic outlook has diminished but remains elevated," the central bank said in a statement, with officials still saying they are considering two rate cuts this year, a possibility that analysts are increasingly doubtful about. At his press conference, US central bank chairman Jerome Powell made it clear that he would not quickly deviate from his wait-and-see stance.

However, during his press conference, Jerome Powell made it clear that the Fed would not quickly deviate from its wait-and-see stance. Asked about the impact of the tariffs implemented by the US executive, Jerome Powell assured that the Fed will make "more informed and better decisions if we wait a few more months or however long it takes to get a real sense of how this will be transmitted to inflation."

Previously on the rise, Wall Street fell sharply following these comments: -0.11% for the Dow Jones, +0.09% for the Nasdaq and -0.05% for the broader S&P 500 index around 9:10 p.m. French time. "Customs duties will probably push up prices and weigh on economic activity," Mr. Powell also declared, while noting that taxes generally take "a little time" to be passed on to consumers.

Adherent to cautious immobility in the face of the slippery slope of tariffs and geopolitical crises, the Fed had concluded the three previous meetings since Donald Trump's return to power in January with a status quo on rates. Earlier in the day, Donald Trump called the chairman of the American central bank , Jerome Powell, a "stupid person." He also claimed that the latter, whom he himself had nominated to lead the institution in 2018, was "politicized . " "There is no inflation" in the United States "and so I would like to see rates go down. Maybe I should go to the Fed. Am I allowed to nominate myself?" the American president said outside the White House.

In the absence of any surprises regarding the level of key interest rates, the news is elsewhere. According to its press release, the Fed judges that "uncertainty regarding the economic outlook has diminished but remains elevated." Its officials, who update their forecasts every three months, believe that the situation will deteriorate even more than anticipated for the world's largest economy.

They now expect gross domestic product (GDP) growth to reach 1.4% by the end of the year (compared to 1.7% forecast in March and 2.1% in December 2024) and predict inflation will accelerate to 3% (compared to 2.7% in March), while the Fed is targeting 2%. They also slightly raised the expected unemployment rate to 4.5% (compared to 4.4% in March).