As was widely expected, the Federal Reserve is holding interest rates steady, despite pressure from President Donald Trump to cut them.
Following a Federal Open Market Committee meeting Wednesday, the central bank announced that its benchmark interest rate will remain at a range of 4.25% to 4.5%. That means borrowing costs for credit cards, loans and auto financing will likely stay elevated until at least mid-September, when the FOMC meets again.
The Fed has kept interest rates near their highest levels in more than two decades over the past two years to curb inflation. Higher rates are meant to rein in spending and help bring inflation under control.
But with inflation creeping up last month to a year-over-year rate of 2.7% — above the Fed’s 2% target — the central bank is holding rates steady, in line with Chair Jerome Powell’s June pledge to “wait and learn more” about the impact of tariffs before making any policy changes.
In a challenge to the Fed’s independence, Trump has spent months pressuring the central bank to lower rates. In July, he called for a cut of at least three percentage points, arguing that high borrowing costs are squeezing households and driving up the government’s interest expenses.
