On Wednesday, at the first Federal Reserve meeting since President Donald Trump took office, the Fed decided to keep the key interest rate at their current level.

No change for the interest rate says the Fed during its Wednesday meeting, despite pressure from Trump. The stock market reacted with a drop- the Nasdaq Composite fell 0.51%, the Dow Jones fell 0.31%, and the S&P 500 lost 0.47%.

In meetings that took place over the last three months, the Fed decreased the interest rate by one percentage point. The federal bank decided not to drop the rate further in Wednesday’s meeting, though more cuts could be coming in 2025.

The Fed is still waiting for the inflation rate to diminish before they feel comfortable issuing more interest rate cuts. Even though Trump said he would work to bring down interest rates, Fed chairman Jerome Powell said that he has had no contact with the President since those comments.

The Fed remains by its goal of waiting for a 2% inflation rate before making any drastic changes to the interest rates. The current US inflation rate is 2.9%, and it has held there for a while now. The interest rate is at 4.25%-4.5%, down from 5.25%-5.5% last year.

The Stock Market Impact

We are seeing a drop for many major stocks across the market indices, with Moderna down 9.39% and Nvidia down 4.1%. Startling AI development news out of China, specifically from DeepSeek, has shook the industry and caused AI stocks like Nvidia’s to decline.

Starbucks is not being impacted by its major policy change to close access to its shops for anyone who is not purchasing from them. This marks a return to the policy that they upheld years ago to keep loiterers out of their establishments and to ensure that they were making a profit with table turnover.

The Fed meeting disclosed that the job market is in a good place right now even though inflation remains high. There is definitely hope that the situation will continue to improve, especially if Trump succeeds in enacting his many America-first policies that are designed to help businesses.

Major stocks were in decline by 1-2% percentage points on Wednesday, including Boeing, Microsoft, and Salesforce. We expect further minor drops throughout the market this week as the Fed decision is processed.

Timothy St. John

Financial Writer – European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources – Business.com, and numerous others. Timothy’s expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.