The Federal Reserve said Wednesday it was leaving interest rates unchanged at its March meeting, citing rising uncertainties over whether President Donald Trump’s policies could push up both inflation and unemployment.

The Federal Open Market Committee (FOMC), which guides the central bank’s monetary policy moves, noted in its announcement that, “uncertainty around the economic outlook has increased” and added it’s focused on risks to both sides of its dual mandate to promote maximum employment and keep inflation at 2% over the long-run.  It’s decision means that its key borrowing benchmark rate will stay in a target range of 4.25-4.5 percent, an elevated level that consumers hadn’t experienced for over a decade.

In addition to announcing its decision on interest rates, the FOMC released a summary of economic projections that showed central bank policymakers are forecasting two 25-basis-point interest rate cuts this year, followed by two cuts of that size in 2026 and one in 2027.

The Federal Reserve’s statement said that “uncertainty around the economic outlook has increased,” with Fed Chair Jerome Powell saying at a press conference that the exact relationship between Trump’s tariffs strategy and stronger near-term price growth was not totally clear given other trends in the economy, but the tariffs are certainly a factor in rising expectations that price growth will accelerate: “we do not need to be in a hurry to adjust our policy stance, and we are well-positioned to wait for greater clarity … Inflation has started to move up now, we think, partly in response to tariffs and there may be a delay in further progress in the course of this year … We think the right thing to do is to wait here. To wait for greater clarity about what the economy’s doing.”

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