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President Donald Trump’s “demand” that interest rates come down further was not met on Wednesday, when the Federal Reserve instead decided to hold rates steady. This decision followed three back-to-back meetings with rate cuts in the months before Trump took office.

Hours after the Fed announced its decision, Trump, who appointed Fed Chair Jerome Powell in his first term, accused the central bank of failing “to stop the problem they created with Inflation,” he wrote in a post on Truth Social. “I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing,” Trump wrote.

He also said the central bank has “done a terrible job on Bank Regulation” and will put that responsibility entirely in the hands of the Treasury Department. It’s not clear if Trump is legally able to strip the Fed of its longstanding authority on banking regulation, however.

Powell, meanwhile, had little to say about recent comments Trump has made about the Fed.

“I am not going to have any response or comment whatsoever on what the president said,” Powell told reporters at a news conference Wednesday after the Fed’s monetary policy meeting. “It is not appropriate for me to do so.”

He also advocated for the central bank’s independence, as Trump pushes for the opposite. “That will give us the best possible chance to achieve these goals for the benefit of the American people,” he said, referring to the Fed’s dual mandate for stable prices and maximum employment. “People should have confidence in that.”

The Federal Reserve’s decision on Wednesday to keep its overnight bank lending rate where it is — following a full percentage point cut last year — means you still have an opportunity to enjoy solid, inflation-beating returns on your savings if you’re smart about where you put them.

At the same time, because the Fed’s rate moves (or inaction) can directly or indirectly influence rates on a range of consumer loans and financial products, you’ll want to do what you can to limit the interest payments on your debts so you don’t spend a dollar more than necessary.

“Borrowers shouldn’t bank on the Fed being in any hurry to cut interest rates again, so focus on paying down high-cost debt. On the bright side, savers will continue to enjoy returns that outpace inflation if the money is parked in the most competitive (accounts),” said Greg McBride, chief financial analyst at Bankrate.

Here are some recommended ways to accomplish both your savings and debt goals.

The unemployment rate has stabilized in part because of lower immigration in recent months, Federal Reserve Chair Jerome Powell said Wednesday.

“The flow across the border has decreased very significantly, and there is every reason to expect that to continue,” he said. “But job creation has come down a bit, too. So, if those things come down together, that can be a reason for the unemployment rate to stabilize.”

“In other words, the break-even rate: As population rate growth slows, the need to make jobs for workers declines as well,” he added.

Economists have noted that the recent years’ surge in immigration has helped to fill worker shortages – industries such as leisure and hospitality, construction and health care – amid a broader US trend of aging and retiring workers as well as slower population growth.

President Donald Trump’s moves to restrict immigration and conduct mass deportations have been touted as avenues to ease demand and provide jobs and better wages for lower-income Americans, some economists counter that those actions could lead to worse labor market outcomes and higher prices.

US stocks closed lower on Wednesday as the Federal Reserve held its benchmark interest rate steady, matching expectations.

The Dow closed lower by 137 points, or 0.31%. The S&P 500 closed lower by 0.47% and the Nasdaq Composite was down 0.51%.

During his remarks to reporters, Fed Chair Jerome Powell said the central bank does “not need to be in a hurry to adjust our policy stance,” offering a signal that rates might remain steady for longer.

“No surprise the Fed is on hold. Even they have to wait and see Trump’s policies on taxes, immigration, deregulation and tariffs before they cut rates,” said Gina Bolvin, president of Bolvin Wealth Management Group, in an email.

Investors largely expected the Fed to hold rates steady.

“We view this as a non-event and that investors should have no change in market views,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report, in an email.

Traders expect a 22% chance the Fed will cut rates at its next meeting in March, compared to yesterday’s expectations of a 31% chance, according to the CME FedWatch Tool.

“On balance, this Fed meeting leans hawkish with a positive view on employment and a cautious take on inflation,” said Thomas Urano, co-chief investment officer at Sage Advisory, in an email.

Mass deportations of immigrants who’ve entered the country illegally and levying steep, sweeping tariffs on America’s largest trade partners, as President Donald Trump promised to do, carry a risk of fueling higher inflation.

The Federal Reserve has a tool to fight higher inflation, but it’s not ready to use it, Fed Chair Jerome Powell said on Wednesday.

That tool is raising interest rates, which the Fed did to help curb inflation after it hit a 40-year high in 2022. Raising rates makes it more expensive for consumers and businesses to borrow money. The added cost means they have less money to spend, which can stop prices from rising as high as they otherwise would.

Just as was the case five years ago, Powell said central bankers would need to see “some evidence” that inflation is on course to move higher to consider hiking rates. “We will discuss that again,” he said, but added that it’s not wrong to assume officials wouldn’t want to start talking about hiking until there’s a more apparent threat of inflation.

With annual inflation hovering just four-tenths of a percentage point above the Federal Reserve’s 2% target as of November, the latest month data available of the central bank’s go-to gauge, some economists have implored the Fed to consider a new inflation target.

After all the progress that’s been made getting inflation down from a 40-year high in 2022 of over 7% for the Personal Consumption Expenditures index, a few tenths of a percentage point higher than 2% may seem trivial. That’s because getting inflation down to a firm 2% could cause inflict pain on consumers if it prompts the central bank to hold rates higher for longer.

But Fed Chair Jerome Powell signaled he has no appetite for remotely contemplating a higher inflation target.

“I think that goal has served us well over a long period of time. It is also the sort of global standard,” he said, referring to many other central banks that similarly target 2% inflation.

“I would not look at changing it anyway, but I certainly would not look at it at a time when you’re not meeting it,” Powell added.

He then doubled down even further to clarify his position: “There is no interest at all in changing it, if I am being at all unclear.”

In touting “resilience” in the financial sector, Federal Reserve Chair Jerome Powell noted Wednesday that banks are well-funded and households — by and large — “are in pretty good shape financially these days.”

However, that’s not the case for all households, Powell added.

“For lower-income households, they are under significant pressure,” he said. “In the aggregate, the numbers are good, but we know that people at the lower end of the income spectrum are struggling with costs.”

The high inflation seen in recent years has had a compounding effect on American households, causing prices of essential goods and services to quickly rise to higher, unpalatable levels.

“Inflation is now much closer to target, but people are not really feeling that,” Powell said.

And recent data is showing some of that financial strain: The share of people making just the minimum payment on their credit cards hit a 12-year high, according to third-quarter 2024 data released last week by the Federal Reserve Bank of Philadelphia.

As the threat and extent of President Donald Trump’s tariffs loom, the Federal Reserve is taking a “wait-and-see” approach before it adjusts monetary policy, Chair Jerome Powell said Wednesday.

Put simply, the situation is quite complex, he said.

“The range of possibilities is very, very wide,” Powell said. “We don’t know what is going to be a tariff; we don’t know for how long, how much, what countries, and we don’t know about retaliation or how it will transmit through the economy to consumers.”

Considering the variables and all the unknowns, the Fed has to “wait and see,” he said.

“What we can do is what we have done, which is study up on this and look at historical experience, read the literature,” he said. “And we will have to see how it goes.”

Read more on tariffs here.

Stocks are flying high: The S&P 500 is up 3% this year despite a sharp selloff on Monday, and stocks are 24% higher over the past year. That’s rattling some nerves on Wall Street that we’re due for a significant correction — or even a bear market, when stocks tumble 20% or more.

Federal Reserve Chair Jerome Powell, in response to a question from CNN’s Matt Egan, said Wednesday that he agrees stocks may be overpriced, but the Fed’s high rates are compensating to keep financial stability in check.

“We look from a financial stability perspective at asset prices generally, along with things like leverage in the household sector, leverage in the banking system, funding risk for banks and things like that.,” Powell said. “Yes, I would say they are elevated by many metrics right now. A good part of that, of course, is this thing around tech and AI.”

But Powell touted resilience in the financial sector, noting banks are adequately capitalized, and household finances are in good shape, overall.

“You can’t just take equity prices. You have to look at rates, too,” Powell said. “That represents a tightening in conditions, with higher rates. So, overall, financial conditions are probably still somewhat accommodatey, but it is a mixed bag.”

The central bank is in a sweet spot with monetary policy and the US economy and is in no rush to make a rate cut, Federal Reserve Chair Jerome Powell said Wednesday.

“We feel like we don’t need to be in a hurry to make any adjustments,” Powell said.

Moving forward, the Fed will continue to be guided by what the data shows, he said.

The Fed expects to see further progress on inflation and is keeping close watch on the health of the labor market, he added, noting a shift there “could foster further adjustments.”

“Right now, we feel like we are in a very good place,” Powell said. “The policy is well-positioned and the economy is in quite a good place.”

President Donald Trump has repeatedly challenged the Federal Reserve’s independence, threatening at times to fire Jerome Powell, the Fed Chair he nominated but has clashed with over the years. (Trump has recently said he would not fire Powell, whose term is up next year.)

Last week, addressing the World Economic Forum, Trump said he would demand the Fed lower rates once he puts in place his plan to lower energy costs. But the Fed doesn’t work that way – nor will it – Powell said Wednesday.

“As I said, countless times over the years, this is who we are, this is what we do,” Powell said. “We study the data, we analyze how it will affect the outlook, and the balance of risks, and we use our tools to try to give it our best understanding, our best thinking to try to achieve our goals. That is what we do. That is what we always do. Don’t look for us to do anything else.”

Powell said research proves central banks should remain independent of politics.

“That will give us the best possible chance to achieve these goals for the benefit of the American people,” he said. “People should have confidence in that.”

Elon Musk, who is leading President Donald Trump’s Department of Government Efficiency aimed at cutting back on government spending, said last month the Federal Reserve is “absurdly overstaffed.”

The Tesla CEO has promised to help cut the number of federal government employees as a means of saving money. His comments, which he posted on X, seemed to imply that he’s eyeing the Fed, an institution he’s endorsed abolishing entirely.

“We run a very careful budget process,” Federal Reserve Chair Powell said Wednesday in response to a reporter’s question on Musk’s comments. “We’re fully aware that we owe that to the public, and we believe we do that. I’ve got no further comment than that.”

The Fed tries to balance job creation with inflation based on the data it receives. But that’s all backward looking. Predicting the future is much more difficult — particularly when Donald Trump is president, as the shoot-from-the-hip president announces a flurry of policies with unclear effect.

Federal Reserve Chair Jerome Powell on Wednesday said that’s why the Fed remains in wait-and-see mode on tariffs, Trump’s signature economic policy, which is lacking in specifics and has yet to take effect.

“I think the committee is very much in the mode of waiting to see what policies are enacted,” Powell said. “We don’t know what will happen with tariffs, with immigration, with fiscal policy and with regulatory policy. We are only just beginning to see and actually are not beginning to see much. I think we need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be.”

Powell said the Fed is “watching carefully,” and it won’t be in a hurry to respond to the administration’s policies “until we see how it plays out.”

A week ago, President Donald Trump said, “I’ll demand that interest rates drop immediately.”

That, however, did not happen Wednesday, as the Federal Reserve opted to hold rates steady at its first monetary policy meeting since Trump took office.

On Wednesday Powell said he has had “no contact” with the president when a reporter asked if Trump has directly communicated his demands to the Fed chair.

Powell was appointed by Trump in the president’s first term but has since been criticized by him.

“I am not going to have any response or comment whatsoever on what the president said,” Powell added. “It is not appropriate for me to do so.”

US stocks moved lower Wednesday after the Federal Reserve announced it would hold its benchmark interest rate steady.

The three major indexes were all down ahead of the decision and continued to slide. The Dow fell about 225 points, or 0.5%. The S&P 500 slid 0.82% and the Nasdaq Composite was 1.1% lower.

The Russell 2000 index, which tracks smaller companies, fell 0.75%.

The decision to hold rates steady was in line with investors’ expectations. Traders began factoring in the potential for “higher-for-longer” rates after the Fed signaled at its December meeting that it might put a pause on cutting rates at the start of 2025.

Investors will be listening closely to Fed Chair Jerome Powell’s news conference to glean any signals about the Fed’s expectations for inflation and how the Fed is considering the potential economic impact of the Trump administration’s policies.

The Federal Reserve just gave its latest report card on its dual mandate of price stability and maximum sustainable employment. And while central bankers noted there’s still some work to do on the former, the latter is looking “solid.”

“The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid,” Fed officials wrote in the latest policy statement issued Wednesday.

In December, the US economy added an estimated 256,000 jobs and the unemployment rate dipped down to 4.1% from 4.2%. The final jobs report for 2024 showed a continuation of one of the longest periods of employment expansion in US history and also highlighted a return to more pre-pandemic norms.

Still, the latest data (which is subject to revision) shows the US labor market isn’t impenetrable: Job growth has slowed, hiring has fallen off, key sectors such as manufacturing are exhibiting weakness and people are staying unemployed for longer.

“Although the low unemployment rate and pace of job growth are indicators of this, some details beneath the surface, such as rising long-term unemployment and the mix of jobs being created, are worth watching,” Greg McBride, Bankrate’s chief financial analyst, wrote on Wednesday. “The Fed will keep their options open in case a sudden weakening materializes in the months to come.”

Fed Chair Jerome Powell said as much Wednesday, calling the labor market a “low-hiring environment.”

“We don’t think we need to cool off anymore,” he said.

“The progress toward 2% inflation has stalled out, and the Fed knows it,” said Greg McBride, chief financial analyst at Bankrate.

Officials “gave no indication in their post-meeting statement that a resumption of rate cuts is likely at the next meeting in March,” he wrote in a note after the Fed announcement. “It will take a run of good inflation data to get us there, whenever that may be.”

That means higher costs for Americans, from mortgages to car loans to credit cards. It will also impact the housing market and auto sales, McBride said.

All 12 Federal Reserve officials who voted at this month’s meeting were in agreement that the central bank should keep interest rates at current levels.

This comes after last month’s policy meeting, when Cleveland Fed President Beth Hammack dissented from the other 11 voters by favoring a rate pause rather than the quarter-point cut that occurred.

Hammack, however, did not vote at this meeting and will serve as an alternate voter for the remainder of the year.