Federal Reserve Holds Rates at 4.25%-4.5% Amid Trump Tariffs, While Bank of England Cuts Rates

The U.S. Federal Reserve announced on May 7, 2025, that it will maintain the federal funds rate in the range of 4.25% to 4.5%, defying pressure from President Donald Trump to cut interest rates. The decision reflects concerns over the administration's sweeping tariffs on major U.S. trading partners, which have influenced the Fed's cautious approach. This stance contrasts with other global central banks such as the Bank of England, which recently cut rates and downplayed the impact of tariffs. The divergence in monetary policy highlights differing responses to the economic challenges posed by tariffs, with the Fed choosing to hold rates steady while other institutions pursue cuts.