The Federal Reserve held interest rates steady but warned of rising risks of inflation and unemployment, adding to economic uncertainty due to Trump administration's tariff policies.
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00:00The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen.
00:08Further, clouding the economy outlook as the U.S. central bank grapples the impact of Trump administration tariff policies.
00:16Speaking at a press conference following the Federal Open Market Committee FOMC meeting,
00:21Fed Chair Jerome Powell said, despite heightened uncertainty, the economy is still in a solid position.
00:30He noted Fed policy will need to be nimble and said,
00:33we believe that the current stance of monetary policy leaves us well-positioned to respond in any timely way to potential economic developments.
00:42Powell said noted that trade policy remains a source of uncertainty that affirms the Fed's need to be in wait-and-see mode.
00:49My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people.
00:58Despite heightened uncertainty, the economy is still in a solid position.
01:04The unemployment rate remains low, and the labor market is at or near maximum employment.
01:09Inflation has come down a great deal, but has been running somewhat above our 2 percent longer-run objective.
01:17In support of our goals, the tariff increases announced so far have been significantly larger than anticipated.
01:24All of these policies are still evolving, however, and their effects on the economy remain highly uncertain.
01:31As economic conditions evolve, we'll continue to determine the appropriate stance of monetary policy based on the incoming data, the outlook, and the balance of risks.
01:41The direction of policy will depend on which of the job and inflation risks developed, or, in the more difficult outcome, whether inflation and unemployment increase together,
01:52and force the Fed to choose which risk is more important to try to offset with monetary policy.
01:58A weaker job market would typically strengthen the case for rate cuts.
02:02Higher inflation would call for monetary policy to remain tight.
02:05Higher inflation would call for monetary policy.
02:06Higher inflation would call for monetary policy.
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