Fed Keeps Rates Steady as Economy Slows

The Federal Reserve kept its rates unchanged as it waits for information on how tariffs and other economic disruptions will affect the economy. The Fed still expects to cut rates twice this year, as growth slows and unemployment increases.

In 2024, the Fed cut rates three times and currently sits at a target rate of 4.25% to 4.5%. Despite these cuts and current rates, mortgage rates have remained around 6.82%.

“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” says Jerome Powell, Federal Reserve chair. “This is something we know is coming, we just don’t know the size of it.”

The committee expects to consider another drop in July as it reassesses incoming data, outlook and balance of risk.