Fed pauses interest rate cuts as Trump's plans create uncertainty

 The Federal Reserve paused its interest rate cutting campaign Wednesday and gave no signal it plans to lower rates again in the near term amid uncertainty spawned by inflation and President Donald Trump’s economic policies.The move is expected to create some tension between the central bank the newly inaugurated president, who has contested that he should have some say in the Fed policy. The Fed Reserve said that the interest rate will remain unchanged in the 4.25-4.50% range, noting that inflation remains "somewhat elevated, and economic outlook is uncertain".
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the (Fed) will carefully assess incoming data, the evolving outlook, and the balance of risks,” the Fed said in a statement following a two-day meeting.In its statement, the Fed removed its assertion in December that inflation “has made progress” toward the Fed’s 2% goal, simply noting that “inflation remains somewhat elevated.” It also gave a nod to a job market that has picked up steam lately - with unemployment edging down to a historically low 4.1% - and doesn’t seem to need a boost from Fed rate cuts.
Meanwhile, the Jerome Powell-led agency noted that achieving employment and inflation goals are "roughly in balance". It noted that the economic activity in the States has continued to expand at a solid pace. The Fed said that the vote in favour of the policy to keep the rates steady was "unanimous". Meaning that all 12 Federal Reserve officials who voted at this month's meeting were in agreement of keeping the interest rates unchanged.