‘Too early to know’ whether employment or inflation should take priority, Powell says
Powell said it’s “too early” to know which side of the Federal Reserve’s dual mandate of high employment and stable prices is more important.
“It’s too early to know that,” he said.
Powell added that the policy rate is in a good spot while the central bank awaits clarity on what President Donald Trump’s tariff policy looks like. He called the Fed’s current monetary policy is only “moderately restrictive” and said that the central bank will continue to monitor economic data.
This “leaves us in a good place to wait and see,” Powell said of current borrowing levels amid uncertainty around tariffs. “We don’t think we need to be in a hurry. We think we can be patient.”
— Alex Harring
Powell warns about impact of tariffs on unemployment, inflation
Fed Chair Jerome Powell said that the current announced levels of tariffs could lead to a slowdown in economic growth and a potential rise in long-term inflation.
“If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment. The effects on inflation could be short-lived, reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent,” Powell said.
— Jesse Pound
Powell sees Fed ‘well-positioned’ on policy
Fed Chair Jerome Powell sees the Fed policy as appropriate despite the rising threat from President Donald Trump’s tariffs.
“The risks of higher unemployment and higher inflation appear to have risen, and we believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic development,” the central bank leader said during his post-meeting news conference.
—Jeff Cox
What the Fed’s decision means for credit cards, auto loans, mortgages and more
The Federal Reserve’s key benchmark rate sets what banks charge each other for overnight lending, but also has a domino effect on almost all of the borrowing and savings rates Americans see every day.
With a rate cut likely postponed until July, the average credit card annual percentage rate has stayed just over 20% — not far from last year′s all-time high. Auto loan rates are also persistently high, with the average rate on a five-year new car loan over 7%.
And since mortgage rates don’t directly track the Fed, but are largely tied to Treasury yields and the economy, those rates are down slightly.
On the upside, the Fed’s pause leaves yields for CDs and high-yield savings accounts well above the annual rate of inflation.
— Jessica Dickler
Fed statement sending a ‘shot across the bow’ to Trump administration, says JPMorgan’s David Kelly
The Federal Reserve’s statement “sending a shot across the bow to the administration, saying essentially if you read between the lines, ‘Your policies are leading to higher inflation, higher unemployment,” David Kelly, chief global strategist at JPMorgan Asset Management, said in an interview with CNBC’s “Power Lunch.”
“It says, ‘We are not going to be in any hurry to cut rates because honestly there are risks to both sides of our mandate here and we are not sure which way we should be playing this,'” he added.
— Michelle Fox
Odds skewed toward another ‘hold’ at next Fed meeting, says Goldman Sachs Asset Management
The recent better-than-feared jobs report supports the Federal Reserve’s decision to hold rates steady — and the central bank will likely continue to stay in a holding pattern at its next meeting, said Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management.
“The onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle,” Shah said. “Any weakening in the labor market, however, could take a number of months to become apparent and we see the odds skewed towards another ‘hold’ at next month’s meeting.”
— Michelle Fox
See what changed in the Fed statement
In this meeting’s Fed statement, the committee notably added that it “judges that the risks of higher unemployment and higher inflation have risen.” Click here for a comparison of the March and May statements.
— Alex Harring
Stocks take a leg lower after Fed commentary calls out rising inflation risk
Stocks turned lower after the Federal Reserve issued its post-decision statement.
“The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen,” the post-meeting statement reads.
The S&P 500 was down 0.4% on the day, while the Nasdaq Composite fell 0.9%. The Dow Industrials was well off its highs, up just 45 points, or 0.1%.
–Darla Mercado
Federal Reserve holds steady on rates once more, as expected
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 on May 7, 2025 in Washington, DC.
Andrew Harnik | Getty Images
Central bank policymakers kept a steady hand on interest rates, maintaining them at the target range of 4.25% to 4.5%.
This time, the Federal Open Market Committee noted that it is “attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”
Click here for more details from CNBC’s Jeff Cox on the Fed’s rate decision.
–Darla Mercado
Where markets stand before the Fed’s announcement
The three major averages were in positive territory – albeit with the Dow Industrials and S&P 500 getting a boost from Disney – just before 1:30 p.m. ET.
The S&P 500 was up 0.46%, while the Dow surged 0.93%. The Nasdaq Composite was just above the flatline.
The U.S. 10-year yield traded at 4.287%, down about 3 basis points, while the rate on the 2-year note inched up by 1 basis point to 3.8%.
–Darla Mercado
Where key consumer rates stand before the Fed’s rate announcement
As the Federal Reserve prepares to announce its policy decision, consumer rates that are closely tied to the 10-year Treasury yield remain high.
The benchmark note yield is trading just below 4.3% as of midday Wednesday, up from the roughly 2% level where it traded during the week of March 11, 2022 – just before the Fed raised rates for the first time in this latest cycle.
Rates on the 30-year fixed-rate mortgage were around 6.9% as of the week of May 2, up from 4.29% in March 2022, according to data from MND. Credit card rates also remain high, hovering at 20.12% as of last week, compared to 16.34% in March 2022, per Bankrate data.
For consumers who are saving, the five-year annual percentage yield was at 1.69% last week, according to data from Haver. That’s up from the 0.5% APY institutions were paying on these CDs in March 2022, but down notably from the 2.87% they offered last September.
–Nick Wells, Darla Mercado
The Federal Reserve will walk a tightrope as May meeting winds down
Central bank policymakers are widely expected to keep interest rates at their current range of 4.25% to 4.5% at the conclusion of their May meeting. Fed funds futures call for a nearly 98% likelihood that the Federal Reserve will stand pat on rate policy.
This meeting is notable because it comes a little more than a month after President Donald Trump rolled out a raft of tariffs, a move that jolted stocks and bonds in April.
Plenty of uncertainty lingers over how these levies will shape up, but Fed Chair Jerome Powell said last month that the duties could put the central bank in a crunch between reining in inflation and lifting economic growth.
Because of this shakiness, traders will be listening closely to Powell’s press conference at 2:30 p.m., seeking clues on what could be next for rates.
Read more here from CNBC’s Jeff Cox on what to expect from the Fed’s rate decision.
–Darla Mercado
