Fed Holds Rates Steady, Signals Confidence in Economy as Rate-Cut Cycle Nears End

The Federal Reserve kept interest rates unchanged at 3.75% as widely expected, citing continued economic resilience and signs of labor-market stabilization, though two officials supported a modest rate cut. Chair Jerome Powell downplayed political tensions and declined to comment further on a Justice Department probe, instead emphasizing the economy’s strength and suggesting that inflationary effects from Trump’s tariffs may fade. While Powell noted that a rate hike is not impossible, he stressed it is not the Fed’s central outlook, and analysts interpreted the Fed’s more optimistic growth view as signaling that last year’s rate-cutting cycle is likely nearing its end. Despite this tone, the U.S. dollar continued to weaken against major currencies