Part 8/11:
Despite the positive economic indicators, the Federal Reserve decided to keep the benchmark interest rate unchanged—an unusual move that has raised eyebrows. Notably, two members of the Federal Open Market Committee dissented for the first time since 1993, voicing concerns over inflation and economic overheating. Fed Chair Jerome Powell expressed worries that tariffs might spur inflation, but critics, including some economists sympathetic to the Trump administration, argue that tariffs do not cause inflation because they do not increase the money supply.
Analysts interpret this dissent as possibly a political move, with expectations that the Fed might cut interest rates later in the year to support economic growth, aligning with the Trump administration’s economic policies.