Home | Blog | Contact

Powell Holds Rates Steady Amid Trade War Tensions

On May 7, 2025, Federal Reserve Chair Jerome Powell announced the Fed will hold interest rates at 4.25%–4.5%, choosing caution over action as the U.S. economy absorbs the shock of newly imposed tariffs.

🚨 What’s happening?
The Trump administration’s massive 145% tariff on Chinese imports has upended global supply chains, pushing up costs for businesses and consumers across the board. Inflation is rising—not from consumer demand, but from trade barriers.

🧭 Powell’s Message: “Wait and See”
Powell made it clear: the Fed won’t budge until it sees more data on how these trade policies play out. Even under public pressure from President Trump to slash rates, the Fed is holding its ground and staying independent.

📈 Markets React with Caution
Although major indexes closed higher on May 7, investors aren’t celebrating just yet. Stocks remain down for the week and year, with growing anxiety around stagflation—that tricky combo of slow growth + rising prices.

🔍 Why this matters:⚠️

The Fed is in a tough spot: inflation is creeping up due to policy, not organic growth. Cutting rates now could worsen inflation. But holding steady risks choking off growth. This delicate balancing act could define U.S. economic momentum for the rest of 2025.

📣 Stay tuned—next moves could reshape opportunities.

Related Realty support the principles of the Fair Housing Act (Title VIII of the Civil Rights Act of 1968), as amended, which generally prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability). As an adjunct to the foregoing commitment, both RelatedISG Realty and Inside Real Estate actively promote, and are committed to, creating and fostering an environment of diversity throughout their respective organizations and franchise systems, and each views such a concept as a critical component to the on-going success of their business operations.

The opinions expressed herein do not necessarily reflect the views or standpoint of Related Realty. While the information provided has been researched and fact-checked using reputable sources, readers are encouraged to verify the accuracy independently. This material may include opinions and data relevant to a specific date, and market insights may change over time. Under no circumstances should any content be construed as legal, tax, or financial advice. The information is provided solely for reference and educational purposes.