Fed leaves rates unchanged, increases inflation projections

The Federal Reserve on Wednesday left interest rates unchanged for a fourth consecutive time. Federal Open Market Committee members still expect to issue two rate cuts this year, unchanged from their projections in March. 

“No one holds these rate paths with a great deal of conviction,” Fed Chair Jerome Powell said during Wednesday afternoon’s press conference, cautioning the public to not read too closely into the so-called “dot plot.” 

“We do this once a quarter. It’s a hard thing to do,” he added. 

Central bankers now expect the personal consumption expenditures (PCE) price index, the Fed’s preferred inflationary gauge, to hit 3%, versus 2.7% in March. 

Committee members anticipate unemployment to end the year at 4.5% versus 4.4% in March. Median expectations for gross domestic product dipped to 1.4% from 1.7% in March. 

In terms of when those two interest rate cuts might come, Powell said it is “very, very hard to say when that will happen,” but he insisted that it will eventually happen.  

“As long as the economy is solid, though, as long as we’re seeing the kind of labor market that we have and reasonably decent growth and inflation moving down, we feel like the right thing to do is to be where we are,” he added. 

When asked whether he planned to stay on as a Fed Governor after his term as Chair ends in May 2026, Powell said he isn’t “thinking about that.” 

“I’m thinking about this,” he said. 

The comment comes after President Donald Trump earlier in the day expressed frustration with Powell and his decision to leave rates untouched so far this year. 

“Europe had 10 cuts, and we had none,” Trump told reporters. “And I guess he’s a political guy, I don’t know. He’s a political guy who’s not a smart person, but he’s costing the country a fortune.”

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