US Fed keeps interest rates unchanged despite pressure from Trump administration

The US Federal Reserve has left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut. The Fed’s decision last night leaves its key short-term rate at about 4.3 per cent, where it has stood after the central bank reduced it three times last year. Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump’s sweeping tariffs. So far, the duties have lifted costs of some goods, such as appliances, furniture, and toys, and overall inflation has risen a bit, though less than many economists had expected. The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly demanded that the central bank reduce borrowing costs as part of his effort to assert control over one of the few remaining independent federal agencies.