Fed keeps interest rates steady, focusing on transparency and using data to assess tariffs

From Investing.com: 2025-05-07 07:25:00

The Federal Reserve keeps the federal funds rate on hold at 4.25% to 4.5%, emphasizing transparency in decision-making amid political criticism. Soft data, like consumer and business surveys, will play a key role in assessing tariff-induced inflation and the potential need for rate cuts. Fed Chair Powell warns of persistently above-target inflation due to tariffs, with the magnitude of inflation effects depending on the size and scope of tariffs. Businesses are already adjusting prices in response to tariffs, and inflation expectations are on the rise, especially in the short term. The Fed must use a wide range of data, including soft data, to stay ahead of economic trends and make informed decisions.



Read more at Investing.com: A Data-Driven Fed Need Not Be a Behind-the-Curve Fed