The Central Bank of the United States, the Federal Reserve, decided to keep the benchmark interest rate unchanged due to the increased uncertainty surrounding President Donald Trump's tariff policies.
On the 7th (local time), the Federal Reserve announced that it had decided to maintain the benchmark interest rate at the current level of 4.25% to 4.5% during the Federal Open Market Committee (FOMC) meeting. Since President Trump's inauguration in January, the FOMC has held three meetings, all resulting in a decision to keep rates unchanged.
The Federal Reserve noted in a press release that "uncertainty regarding the economic outlook has increased further," adding that "the risks of higher unemployment and inflation have grown."
The Federal Reserve indicated that while it aims to achieve maximum employment and maintain inflation at 2%, it has become more difficult to achieve these goals due to the tariff policies.
Jerome Powell, the chair of the Federal Reserve, stated at a press conference on the same day that President Donald Trump's pressure for rate cuts does "not affect our job performance at all."
As concerns about rising prices and economic slowdown grew due to his aggressive tariff policies, President Trump repeatedly pressured Powell and the Federal Reserve for interest rate cuts.
Chair Powell emphasized, "We will use the means we have for the benefit of the American people," and added, "The economic indicators, outlook, and risk balance are everything we consider." This appears to show a commitment to making monetary policy decisions based on principles despite Trump's pressure.
Moreover, Chair Powell reaffirmed the previous position that it is necessary to wait until the impact of tariffs on the economy becomes clearer.
He stated, "I do not feel the need to rush (the rate cuts)," suggesting that "for now, it is appropriate to be patient." He continued, saying that if significant tariff increases persist, the likelihood of rising inflation, slowing growth, and increasing unemployment is high, while there is "considerable uncertainty" regarding how tariff policies will evolve.
As a result of this decision by the Federal Reserve, the interest rate gap between South Korea (2.75%) and the United States remains unchanged at the upper limit of 1.75%.