Federal Reserve Holds Rates Steady a Third Straight Time as Risks to Both Goals Rise
On May 7, 2025, the Federal Reserve issued the statement of the Federal Open Market Committee, maintaining the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. It was the Committee's third consecutive meeting holding rates steady, after similar decisions in January and March 2025. The statement was released at 2:00 p.m. Eastern time.
The statement said that although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace, the unemployment rate has stabilized at a low level in recent months, labor market conditions remain solid, and inflation remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
Compared with the March statement, the language on risks was notably stronger. Uncertainty about the economic outlook has increased further, the Committee said, and it is attentive to the risks to both sides of its dual mandate, judging that the risks of higher unemployment and higher inflation have risen. Against the backdrop of sharply higher tariffs, the statement captured the two-sided pressure the Fed faced, from slower growth on one side and higher prices on the other.
On policy operations, the Committee said it will carefully assess incoming data, the evolving outlook, and the balance of risks in considering the extent and timing of additional adjustments to the target range. It will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, and it reaffirmed that it is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
The action was approved unanimously by the 12 voting members, including Chair Jerome H. Powell and Vice Chair John C. Williams, with Neel Kashkari voting as an alternate member at this meeting. (Source: Federal Reserve)
Related: Federal Reserve Holds Rates Steady: Target Range Kept at 4.25% to 4.50%
Source: Federal Reserve
Published by GSM · USA (original Chinese edition)
Photo: 图：美联储主席鲍威尔2025年5月7日在联邦公开市场委员会会后记者会上答记者问。图：美联储，公共领域，via Wikimedia Commons / Photo: Chair Powell answers reporters' questions at the FOMC press conference on May 7, 2025. Photo: Federal Reserve, Public domain, via Wikimedia Commons
