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May 8, 2025

Federal Reserve leaves key rate unchanged, sees risk of higher prices and unemployment

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON — The Federal Reserve kept its key interest rate unchanged Wednesday, brushing off President Donald Trump's demands to lower borrowing costs, and said that the risks of higher unemployment and higher inflation have risen.

The Fed kept its rate at 4.3% for the third straight meeting, after cutting it three times in a row at the end of last year. Many economists and Wall Street investors still expect the Fed will reduce rates two or three times this year, but the sweeping tariffs imposed by Trump have injected a tremendous amount of uncertainty into the U.S. economy and the Fed's policies.


 
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