Federal Reserve leaves its benchmark interest rate unchanged

The Federal Reserve said Wednesday it is leaving its benchmark interest rate unchanged, resisting pressure from President Trump to lower U.S. borrowing costs as policy makers assess the economic impact of his trade policies.

The Fed said it will maintain the federal funds rate at its current range of 4.25% to 4.5%, where it's been parked since the central bank last moved to lower short-term rates in December.

The federal funds rate — the rate banks charge each other for short-term loans — helps determine what businesses and consumers pay in interest on loans and credit card debt.

The Fed, which has a dual mandate to keep inflation low while maintaining a healthy job market, on Wednesday signaled that economic risks are on the rise.

"Uncertainty about the economic outlook has increased further," the central bank said in its statement. "The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."

On a positive note, the Fed added that the nation's jobless rate "has stabilized at a low level in recent months, and labor market conditions remain solid."

The Fed's to hold interest rates steady comes amid pressure from Mr. Trump to cut interest rates, with the president writing on social media last month that the central bank has been "TOO LATE AND WRONG" for holding off on further reductions.

Economists are forecasting that Mr. Trump's tariffs will boost inflation later this year. That could provide the Fed with the impetus to cut rates, although inflation cooled in March.

Given more subdued inflation and a buoyant job market, most economists had projected that the Fed would maintain interest rates at today's meeting, despite some headwinds such as eroding consumer confidence and a sharp decline in first-quarter U.S. economic growth.

"For the time being the Fed remains in a holding pattern as it waits for uncertainty to clear," said Ashish Shah, CIO of public investing at Goldman Sachs Asset Management, in an email after the Fed's announcement.

Shah added, "Recent better-than-feared jobs data has supported the Fed's on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle."