On May 8, 2025, Vietnam time, the US Federal Reserve (Fed) officially announced maintaining the benchmark interest rate at around 4.25-4.5%, marking the third consecutive meeting where the agency has not adjusted interest rates, following meetings in December 2024, January 2025, and March 2025.
In the context of increasing pressure from President Donald Trump and strong calls to reduce interest rates, especially as inflation indicators show signs of cooling, the Fed maintains a cautious stance. According to the agency's assessment, despite trade policies affecting export activities, the US economy continues to grow at a stable rate. The labor market continues to improve with unemployment rates at their lowest in recent months. However, inflation has not yet decreased to the 2% target, and short-term economic prospects are covered by many uncertain factors, especially from the trade war launched by the Trump administration.
Speaking at the press conference after announcing the interest rate decision, Fed Chairman Jerome Powell acknowledged that current trade tensions are negatively impacting US GDP growth prospects. However, Powell affirmed that the Fed will continue to closely monitor economic indicators and be ready to intervene with appropriate monetary policy measures if necessary. He also emphasized that hastily cutting interest rates would not be a wise choice at the current time, especially when inflation has not yet been fully stabilized.
Additionally, Chairman Powell appeared cautious about the Fed's ability to complete its monetary policy targets for 2025. If trade barriers continue to be imposed in the coming period, the Fed may face many obstacles in implementing easing policies, due to concerns that inflation could reignite.
According to analyst forecasts, the Fed is likely to only implement two interest rate cuts in 2025, each reduction by 0.25 percentage points, and these adjustments may be implemented in the second half of the year. The Fed's next meeting schedule will be in June, July, September, October, and December.
