A decision that met market expectations, the Federal Reserve (Fed) kept interest rates unchanged at 4.50% at the latest FOMC meeting early this morning.
This has provided some support for the US dollar's movement which showed a recovery after the meeting ended due to the possibility of further interest rate cuts.
Following the interest rate announcement, Fed Chairman Jerome Powell came out to explain the decision based on the current economic situation.
The market assessed Powell's speech as being delivered in a cautious tone, stating that the United States (US) economy is still in a strong condition.
The labor market is still seen as stable and US inflation is showing a decline towards the central bank's target.
Touching on the negative economic growth for the first quarter of 2025, Powell explained that the current unstable situation in import activity triggered by the tariff war has made it difficult to read the Gross Domestic Product (GDP) data.
The central bank will continue to assess the uncertainties that will affect future spending and investment.
For now, the Fed is taking a wait-and-see approach before being completely confident about making changes to monetary policy.
Powell also said that Trump's pressure will not affect their work at the central bank, maintaining that waiting is the best course of action for now.
The focus now shifts to the Bank of England (BOE) policy meeting, with interest rates expected to be cut by 25 basis points from 4.50% to 4.25%.
In addition, the market will also follow the development of US-China trade talks that will be held this weekend in Geneva, Switzerland to discuss the issue of tariffs.
