Federal Reserve Holds Interest Rates for Fourth Time in 2025

The Federal Reserve held its benchmark interest rate steady at a range of 4.25% to 4.5% on Wednesday, its fourth decision of 2025 and under President Donald Trump.

In a move widely expected by markets, the Federal Open Market Committee kept the overnight borrowing rate at a target range of 4.25% to 4.5%, the level it was at in May 2025.

The Federal Open Market Committee said in a statement on Wednesday that although fluctuations in US net exports weighed on the data, recent indicators suggest that economic activity has continued to expand at a solid pace.

The committee added that the unemployment rate remains low, and labor market conditions are stable. Inflation remains moderately elevated. The committee stated: “The committee seeks to achieve maximum employment and a 2 percent inflation rate over the long term. Uncertainty about the economic outlook has diminished but remains elevated. The committee pays close attention to the risks to both aspects of its dual mandate.”

It stated that in considering the extent and timing of further adjustments to the target range for the federal funds rate, the committee will “carefully evaluate incoming data, evolving expectations, and the balance of risks.”

The committee indicated that it will continue to reduce its holdings of Treasury securities, agency debt, and mortgage-backed securities.

The committee stated: “In assessing the appropriate stance of monetary policy, the committee will continue to monitor the implications of incoming information for the economic outlook. The committee will be prepared to adjust the stance of monetary policy as appropriate should risks emerge that could impede the achievement of its objectives.”

It added: “The committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and expectations, and financial and international developments.”