The Fed motivates its decision by stating that inflation has increased, as has the risk of increased unemployment. The uncertainty has increased regarding the future development of the economy, the central bank writes in its decision, which was unanimous.
However, the Fed notes at the same time that unemployment has stabilized at a low level over the past few months.
Robert Bergqvist observes that the central bank is currently very uncertain about the future economic development. The effects of the White House's policy, including tariffs and a shift in fiscal policy, cannot yet be assessed.
In this case, it's about enormous and drastic changes in policy. It will have effects on the US economy, but the Fed cannot say today how it will play out, says Bergqvist.
He points out that the prerequisites can change rapidly.
The American central bank must have an extremely high level of preparedness to quickly be able to change direction, and then I see above all that perhaps the interest rate must be lowered.
Wednesday's message was expected. It was also the third time during Donald Trump's second presidential period that the Fed makes a decision not to change the interest rate. Previously, the central bank lowered the key interest rate three times in a row.
Trump has repeatedly criticized the Fed for not lowering the interest rate – he has also threatened to fire the head Jerome Powell.
