The U.S. Federal Reserve has taken the decision to keep its interest rates unchanged, which will anger President Donald Trump.

Chairman of the Federal Reserve Jerome Powell explained that inflation remains too high and there is uncertainty surrounding tariffs.

The Federal Reserve’s benchmark rate remains in a range of 3.50 to 3.75 per cent. Its inflation target is 2 per cent.

Today’s decision comes as the S&P 500 went over the 7,000 point mark for the first time in history, which led President Trump to jubilantly exclaim, “ America Is Back!” 

President Trump is disgruntled with Powell and believes he is too cautious and should be bringing down the benchmark rate quicker. He plans to replace Powell very soon. Powell’s term ends in May.

Addressing the issue of the Fed’s independence and pressure from the President of the United States, ;Powell said: “If you lose that, it would be hard to restore the credibility of the institution. If people lose their faith that we’re making decisions only on the basis of our assessment of what’s best for everyone, for the wider public, rather than trying to benefit one group or another – if you lose that, it’s going to be hard to regain it.”

President Trump argues that the stock market is riding high, unemployment has steadied and the economy is growing.

The Fed cut rates three times last year.

Addressing reporters at a press conference today, Powell said: “The U.S. economy is coming into 2026 on a firm footing. The Fed will continue to do its job with objectivity and a commitment to serve the American people. The Central Bank is well-positioned to determine the extent and timing of future policy adjustments.

“Many of my colleagues think it’s hard to look at the incoming data and say that policy is significantly restrictive at this time. I expect to see the effects of tariffs flowing through goods prices peaking and then starting to come down, assuming there are no new major tariff measures that are begin.”