Fed interest rates unchanged amid recession fears, tariff uncertainty | LiveNOW from FOX

As expected, the Federal Reserve will leave interest rates unchanged – for now – as it changes the U.S. economic outlook and predicts slower growth than it did three months ago.

"Uncertainty around the economic outlook has increased," the Fed said in a statement released after its two-day meeting .

The Fed also now expects the economy to grow more slowly this year and next than it did three months ago, according to a set of quarterly economic projections also released Wednesday. It also expects the unemployment rate to tick higher, to 4.4%. Policymakers also expect inflation will pick up slightly by the end of this year, to 2.7% from its current level of 2.5%. Bother are above the central bank’s 2% target.

The Fed does expect to cut interest rates later this year, but what were once seen as "good news" rate reductions in response to a steady decline in inflation back to the Fed’s target of 2%, now could become "bad news" cuts that would be implemented to offset an economy struggling in the wake of widespread tariffs, rapid cuts in government spending, and a spike in economic uncertainty.

Dan Varroney and Lydia Mashburn Newman join LiveNOW's Andrew Craft to discuss.

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