Business, Finance & Tech
Federal Reserve Holds Interest Rates Steady Amid Trump Tariff Uncertainty
As the Trump administration’s sweeping tariff policies continue to cause ripples in global markets, the Federal Reserve announced it is holding its benchmark interest rate steady—for now.
Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank is in a “wait and see” mode, looking for more economic clarity before adjusting policy.
“For the time being, we're well positioned to wait for greater clarity before considering any adjustments to our policy stance,” said Powell.
The Fed’s decision comes amid concerns that sustained tariff hikes could lead to higher inflation, slower economic growth, and increased unemployment.
“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,” Powell added.
In this period of economic unpredictability, financial experts are urging consumers to act wisely.
“This is a good time for savers,” said Greg McBride, Chief Financial Analyst at Bankrate.com. “If you're shopping around and putting your money in the most competitive savings accounts and CDs, you're earning returns that are above the rate of inflation.”
McBride recommends placing savings in federally insured, high-yield online accounts, many of which offer returns over 4% with minimal or no deposit requirements. This is a stark contrast to traditional brick-and-mortar banks, which often offer just 0.1% interest.
He cautions that if the Fed eventually lowers rates later this year, those savings yields could drop. Acting now to lock in those rates is a smart move.
For longer-term goals, McBride says investors can afford to take more risk, leaning toward stocks. However, he advises that any funds needed within five years should remain in safe, secure investments.
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By: CNN Newsource
May 8, 2025
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