As expected, the Federal Reserve left interest rates unchanged at their May meeting.
The central bank's decision leaves the benchmark federal funds rate at a range of 4.25% to 4.5%.
Federal Reserve Chair Jerome Powell said in remarks following the announcement that the economy is in a "solid position" despite "heightened uncertainty" and noted that inflation has "come down a great deal, but has been somewhat above our 2% longer-run objective."
"The new administration is in the process of implementing substantial policy changes in four distinct areas – trade, immigration, fiscal policy and regulation," Powell said. "The tariff increases announced so far have been significantly larger than anticipated. All these policies are still evolving, however, and their effects on the economy remain highly uncertain. If the large increases in tariffs that have been announced are sustained, they're likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment."
But other financial experts don't see it that way. Richard Rosso, certified financial planner, tells KTRH he's a bit miffed at the Fed. "The fundamentals of the economy...whether it's employment numbers, wage growth, or even the pace of inflation which is heading lower...all of that looks really good," he says. "At the Fed they typically look for maximum employment and low inflation. Well guess what? This year, the inflation indicator they use is lower than when they lowered rates last year."
President Trump has been pushing the Fed to lower rates, but it has not yet done so since his return to the White House. Right now, the markets are predicting about a 1-in-3 chance of a rate cut at the Fed's next meeting in mid-June. Rosso thinks they'll have to wait a bit longer. "If these tariffs do not prove inflationary--which I don't think they will--and we get some trade deals done, then inflation will probably fall to their target and we'll probably have one pre-emptive cut," he says. "But you've got to remember the markets were looking at 6 or 7 rate cuts this year at the beginning of the year, and you're maybe going to get 1 or 2."