The Federal Reserve left interest rates unchanged at its latest policy meeting, voting 10–2 to maintain the benchmark rate in the 3.50%–3.75% range, as officials signaled no urgency to deliver further cuts in the near term. The decision was widely anticipated by financial markets and reflected the Fed’s cautious, data-dependent approach amid improving economic conditions.

Attention quickly shifted from the policy outcome to Chair Jerome Powell’s remarks during the post-meeting press conference, where he addressed mounting political pressure and threats to the Fed’s independence. Facing questions about criticism from the Trump administration and the possibility of legal action, Powell emphasized his confidence in the institution’s ability to remain independent, underscoring that both he and his colleagues are firmly committed to that principle. He also offered pointed advice for his eventual successor, urging them to avoid becoming entangled in elected politics.

On the economic outlook, Powell noted clearer signs of strengthening growth and said risks to both inflation and employment have diminished. He added that the central bank remains well positioned to assess incoming data and determine when additional policy easing may be appropriate.

Market reaction was relatively subdued. Major U.S. equity indexes slipped modestly following the policy announcement before ending the session largely flat. Treasury yields edged higher, with the 10-year yield rising to around 4.25% and the two-year yield climbing to approximately 3.58%. Meanwhile, interest rate futures shifted to price in the next potential Fed rate cut at the June 16–17 policy meeting.

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