The Fed is holding interest rates steady as inflation cools and spending slows

The Federal Reserve has chosen to keep interest rates steady as inflation cools to 2.1% in April, nearing its target of 2%. Although spending increased slightly by 0.2%, concerns regarding tariff impacts remain, signaling cautious behavior from consumers.

With consumer savings rising from 4.3% to 4.9%, households are embracing a more conservative spending approach amidst tariff uncertainties. The Fed’s decision to maintain rates indicates they are prioritizing inflation control over immediate reductions in rates.