The Federal Reserve on Wednesday opted to hold interest rates steady despite increased pressure from President Donald Trump to ease monetary policy.

After a two-day meeting of its monetary policy committee in Washington, D.C., the central bank announced it would hold its rate target at 4.25% to 4.50%. Investors anticipated the move. The Fed’s target rate remains a full percentage point lower than it was when the Fed pivoted to cutting rates last September.

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The meeting of the Federal Open Market Committee was the third one since Trump imposed sweeping tariffs, which have since have been challenged in the courts.

Looming over the Fed’s meeting was the commentary from Trump, who has pressed the central bank to cut rates.

The Fed is targeting 2% inflation, and, broadly speaking, inflation has fallen closer to that level, but Fed officials don’t want to start cutting too soon and cause inflation to spike again.

Inflation in closely watched consumer price index has fallen to 2.4% and the Fed’s preferred gauge, the personal consumption expenditures price index, showed inflation at 2.1% in April.

Ahead of the Wednesday decision, earlier in the morning, Trump said he thinks Fed Chairman Jerome Powell “hates” him. He has also dubbed the Fed chief “Too Late Powell” for his unwillingness to start slashing interest rates.

In late May, Trump also summoned Powell to the White House, where Trump pushed for lower rates in a meeting that was attended by several administration officials, including Vice President JD Vance, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick.

In a post on social media the last time the Fed opted to hold interest rates steady, Trump called Powell a “FOOL, who doesn’t have a clue.”

“Other than that, I like him very much! Oil and Energy way down, almost all costs (groceries and ‘eggs’) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF ‘TOO LATE!’ ENJOY!” Trump said.

Other Trump administration officials, like Bill Pulte, the director of the Federal Housing Finance Agency, have also encouraged the Fed to lower interest rates.

The Fed has traditionally been independent and insulated from partisan politics.

The central bank has to deal with the political pressure to cut rates on top of analyzing the current economic data to determine the best course of action.

After the onset of the pandemic, the Fed slashed interest rates to near-zero levels and held them there until inflation began trending up. Inflation peaked at about 9% in mid-2022 and the Fed began aggressively hiking rates to drive it down.

In some concerning news, the economy contracted in the first quarter of 2025, according to a revised estimate of gross domestic product. It showed GDP declined at a 0.2% annual rate, a reading dragged down by a big increase in imports as families and businesses tried to get ahead of the tariffs.

The decline in GDP is a notable shift from the final quarter of last year, which saw economic output increase by a solid 2.4%. It also marks the only time, other than one quarter in 2022, that the economy has contracted since the pandemic.

TRUMP’S PRESSURE CAMPAIGN ON POWELL IN FOCUS AHEAD OF FED INTEREST RATE DECISION

The contraction has also raised alarm bells about the possibility of a recession, although the labor market has still been notching positive, albeit slowing, labor force growth.

The Fed’s next meeting is set for mid-June.