WASHINGTON, May 7 (Xinhua) -- The U.S. Federal Reserve on Wednesday left target range for the federal funds rate unchanged at 4.25 percent to 4.5 percent, as the Trump administration's tariff policies are expected to lead to higher inflation and slower economic growth.
"Uncertainty about the economic outlook has increased further," the Federal Open Market Committee (FOMC), the central bank's policy-setting body, said in a statement after a two-day meeting.
"The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen," the statement read.
As tariff-related turmoil escalates and inflation risks resurface, economists and market participants are increasingly concerned about slower economic growth, with some fearing a hit to the labor market and the possibility of a recession. Even Fed officials have expressed their concerns.
"It wouldn't surprise me that you might start seeing more layoffs, a tick up in the unemployment rate going forward if the big tariffs in particular come back on," Fed Governor Christopher Waller told Bloomberg in a recent interview. "I would expect more rate cuts, and sooner, once I started seeing some serious deterioration in the labor market." ■