The US Federal Reserve has kept its interest rate unchanged, resisting a strong political push from US President Donald Trump to reduce borrowing costs.
Federal Reserve Chairman Jerome Powell said the time is quite dynamic, especially as trade between the Trump administration and other countries is ongoing.
The central decision to keep the interest rate between 4.25 and 4.50 for the fifth week has come as a shock for President Trump, since Powell has refused to implement the measures proposed by the US administration.
This came amid fresh data released this week, which suggested that the world’s largest economy returned to growth in the second quarter of the current financial year.
In announcing its decision on Wednesday, the Fed cited a moderation in economic activity in the first half of the year and "solid" labour market conditions.
It further stated that “uncertainty about economic activity remains high”, with inflation levels somewhat elevated.
Powell, in response to a question on tariff deals, said, “It's been a very dynamic time for these trade negotiations. We are still far from seeing where these trade talks will ultimately settle.”
Trump’s latest imposition of tariffs will come into effect on Friday, when dozens of trade partners of the US government will face baseline tariffs of ten per cent, rising to tariffs of up to fifty per cent.
Despite dissents by Fed governors Christopher Waller and Michelle Bowman, Powell maintained that it had been a "good meeting" with thoughtful arguments around the table.
On Wednesday, Trump signed orders for fresh tariffs on imports, including copper products, adding further uncertainty in global markets.
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