Driving the news: The Federal Reserve kept interest rates unchanged while acknowledging that Trump's tariffs are creating a challenging economic mix of higher inflation and slower growth.
For context: Rates stay at 4.25-4.5%, but Fed officials updated their forecasts to reflect tariff impacts.
They're now expecting 3% inflation this year instead of 2.7%, while cutting growth projections from 1.7% down to 1.4%.
Unemployment could also edge up to 4.5%.
Why it matters: The Fed is caught in a tough spot trying to balance its dual mandate. While the job market still looks solid on the surface, there are some concerning trends: people filing for unemployment benefits for multiple weeks hit nearly 2 million last week, the highest since late 2021. At the same time, businesses are reporting increasing costs from tariffs that could eventually show up in consumer prices.
What we're watching: Wall Street doesn't expect any rate cuts through July, despite Trump's continued calls for lower rates.
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
No-BS insights, built for car dealers. Free, fast, and trusted by 55,000+ car dealers.
