Washington: The US Federal Reserve paused interest rate cuts again on Wednesday and noted an increase in economic uncertainty, as it navigates an economy unnerved by President Donald Trump's stop-start tariff rollout.
Policymakers voted to hold the US central bank's key lending rate at between 4.25 percent and 4.50 percent, the Fed announced in a statement.
They also cut their growth forecast for 2025 and hiked their inflation outlook, while still penciling in two rate cuts this year -- in line with their previous forecast in December.
The Fed's vote was not unanimous, with one governor rebelling in opposition to his colleagues' decision to slow the pace at which the Fed shrinks the size of its balance sheet.
Since taking office in January, Trump has ramped up levies on top trading partners including China, Canada and Mexico -- only to roll some of them back -- and threatened to impose reciprocal tariffs on other countries.
Many analysts fear Trump's economic policies could push up inflation and hamper economic growth, and complicate the Fed's plans to bring inflation down to its long-term target of two percent while maintaining a healthy labor market.
"It's quite unclear how high the tariffs will get, how widespread they will be, and how long they will last," former Boston Fed president Eric Rosengren told AFP ahead of the rate decision. "And it's very hard to estimate what the impact on inflation or unemployment is going to be until they get a little more visibility into that."
