Fed Holds Rate at 4-1/4 to 4-1/2 Percent
The FOMC decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. It will continue reducing its holdings of Treasury securities, agency debt and agency mortgage-backed securities. 1
The statement says uncertainty about the economic outlook has increased further, and that the risks of higher unemployment and higher inflation have risen. 1
The statement describes economic activity as expanding at a solid pace despite swings in net exports. It says the unemployment rate has stabilized at a low level and inflation remains somewhat elevated. 1
Chair Powell said first-quarter GDP edged down, reflecting swings in net exports likely driven by businesses bringing in imports ahead of potential tariffs. Private domestic final purchases grew at a solid 3 percent rate. 1
Powell said the current policy stance leaves the Committee well positioned to respond in a timely way to potential economic developments. 1
The minutes record that participants continued their review of the monetary policy framework, focusing on the price-stability side of the dual mandate and the FOMC's strategy. The meeting was held May 6–7, 2025. 1