Despite pressure from the White House, the United States Federal Reserve will hold interest rates steady at 4.25-4.50 percent, on par with economists’ expectations as tariff-driven uncertainty weighs on the US economy.

The Fed, the US central bank, announced its decision on Wednesday as it wrapped up its two-day policy meeting.

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“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” the Fed said in a statement.

Rates have held steady at this rate since December. Federal Reserve Chairman Jerome Powell has long argued that keeping rates consistent puts the central bank in a strong position to respond to inflationary pressures driven by US President Donald Trump’s tariffs.

“Recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” the Fed added.

Inflation ticked up to 2.7 percent, according to the consumer price index report released earlier this month.

But the decision also drew dissent from two of the central bank’s governors, both Trump appointees who agree with him that monetary policy is too tight.

This week’s meeting marks the first time in more than 30 years that two members of the Fed’s seven-person Washington-based Board of Governors voted against a rate decision at the consensus-driven central bank, and it will likely stoke debate about how Trump’s public pressure to cut rates is playing out at an institution designed to set monetary policy independent of demands from elected officials.

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Both Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, who has been mentioned as a possible nominee to replace Powell when his term expires in May 2026, “preferred to lower the target range for the federal funds rate by one quarter of a percentage point at this meeting”, the Fed’s policy statement said.

Pressures on Powell

Last week, the US president claimed that he thought the central bank was ready to reduce interest rates after a visit to Fed headquarters.

On Wednesday, prior to the rate decision’s announcement and on the heels of mixed GDP data, the White House said in a statement that “There are no more excuses — now is the time for ‘too late’ Powell to cut the rates!”

The claims are the latest in a slew of attempts by the White House to pressure the central bank to lower rates, including threats of replacing Powell and ongoing personal attacks on the Fed chair. Last week, Trump called Powell a “numbskull”.

But Powell has long maintained that the central bank’s decisions on monetary policy should remain independent of political pressures.

In response to a question on whether the needs of the federal government will be considered in future policy decisions, Powell said, “We don’t consider the fiscal needs of the federal government. No advanced economy’s central bank does that.”

If the central bank did consider that, it would undermine the credibility of both the central bank and US fiscal policy, he said.