Fed holds interest rates steady, taking a pause from rate cuts to assess the economy

"The Federal Reserve held interest rates steady Wednesday, as expected, despite pressure from President Trump for much lower borrowing costs. The central bank has already cut its benchmark interest rate three times since September, making it cheaper to borrow money to buy a car, expand a business or carry a balance on a credit card. But with inflation still above target, most Fed policymakers voted to hold their target rate unchanged, in a range between 3.5 and 3.75%."

"President Trump wants much lower interest rates, and he's waged an unusually aggressive campaign to push the Fed in that direction, even though the central bank is designed to be insulated from political interference. Trump has tried to fire Fed Governor Lisa Cook, which would allow him to replace her with someone who would support bigger rate cuts. So far, that effort has been blocked by the Supreme Court."

""Public service sometimes requires standing firm in the face of threats," Powell said in an unusually combative video statement. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditionsor whether instead monetary policy will be directed by political pressure or intimidation.""

The Federal Reserve left its benchmark interest rate at 3.5–3.75% after earlier three cuts since September. Policymakers noted some stabilization in unemployment but said inflation remains somewhat elevated, prompting most to hold rates; two governors dissented for a quarter-point cut. President Trump has campaigned aggressively for deeper rate cuts, attempted to remove Fed officials and reportedly threatened to fire Chair Jerome Powell, actions blocked by the Supreme Court or resisted. Powell pushed back against political pressure after the Justice Department subpoenaed the Fed in a cost-overrun probe, asserting the Fed must set rates based on evidence, not intimidation.

Read at www.npr.org