World Business Report
Fed keeps interest rates unchanged despite Donald Trump pressure
May 7, 2025
Jerome Powell announces the Federal Reserve will keep interest rates unchanged amid tariff uncertainties. Discussions reveal the tension between Trump's comments and market reactions, highlighting the importance of separating government influence from Fed decisions. The impact of tariffs on American manufacturing is explored, alongside a family-owned business striving to maintain quality. Additionally, Microsoft's legal victory in acquiring Activision Blizzard amid market shifts showcases the dynamic landscape of the tech industry.
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Quick takeaways
- The Federal Reserve maintained interest rates, citing tariff uncertainty and a data-dependent approach to future economic assessments.
- U.S. manufacturers face both challenges and opportunities from tariffs, revealing complexities in the interconnected global trade landscape.
Deep dives
The Fed's Interest Rate Decision
The Federal Reserve, led by Jerome Powell, decided to keep interest rates unchanged despite pressure from President Trump for cuts. Powell highlighted the uncertainty surrounding tariff policies and their potential impacts on economic growth and employment. He asserted that the Fed's current policy rate is appropriate as they await further clarity from incoming data. The Fed's focus remains on maintaining price stability and ensuring maximum employment, with Powell indicating they're prepared to respond as economic conditions evolve.
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