Federal Reserve Leaves Interest Rates Unchanged, Warns of Stagflation

‘Despite heightened uncertainty, the economy is still in a solid position,’ Fed Chair Jerome Powell said.

Federal Reserve Chair Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting at the William McChesney Martin Jr. Federal Reserve Board Building in Washington, on May 7, 2025. Andrew Harnik/Getty Images

The Federal Reserve left interest rates unchanged for the third consecutive meeting as policy-setting officials warned about the effect of tariffs on unemployment and inflation.

Monetary officials completed their two-day policy meeting on May 7, voting to keep the benchmark federal funds rate—a tool for influencing economic activity—at a range of 4.25 percent to 4.5 percent.