As widely expected, the Fed held the federal funds target rate unchanged at its open market committee meeting this week. Despite a war raging in the Middle East, Congress debating the merits of Trump’s Big Beautiful Bill, and a recent downgrade of the US sovereign credit rating by Moody’s, the Fed did not see a need for stimulus yet. The Fed continues to be wary of the impact that tariffs could have on inflation, although there are limited signs of an increase yet, and the job market continues to exhibit relative strength. These factors contributed to the Fed decision to maintain rates at current levels.
