This is a comparison of Wednesday’s Federal Open Market Committee statement with the one issued after the Fed’s previous policymaking meeting in March.
Text removed from the March statement is in red with a horizontal line through the middle.
Text appearing for the first time in the new statement is in red and underlined.
Black text appears in both statements.
Arrows pointing outwards More
SWITZERLAND ALWAYS imagined it would be where the fate of the global trading system was decided. It was in Geneva in 1947 that 23 countries signed the General Agreement on Tariffs and Trade, which governed negotiations over the next four decades. Geneva is also home to the World Trade Organisation, founded with high hopes in 1995. Switzerland’s position has been jeopardised by President Donald Trump’s disdain for the WTO and his love of tariffs. But Geneva once again finds itself hosting high-stakes trade talks between the world’s biggest economies. More
Banks quickly raised interest rates to record levels and added new monthly fees on credit cards last year when a Consumer Financial Protection Bureau rule threatened a key revenue source for the industry.
Now they’re far more reluctant to reverse those steps, even after bank trade groups succeeded in killing the CFPB rule in federal court last month.
Synchrony and Bread Financial, two of the biggest players in the business of issuing branded credit cards for the likes of Amazon, Lowe’s and Wayfair, are keeping the higher rates in place, executives said in recent conference calls.
The New York Stock Exchange is seen during morning trading on July 31, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Last year, banks quickly raised interest rates to record levels and added new monthly fees on credit cards when a Consumer Financial Protection Bureau rule threatened a key revenue source for the industry.
Now, they’re far more reluctant to reverse those steps, even after bank trade groups succeeded in killing the CFPB rule in federal court last month.
Synchrony and Bread Financial, two of the biggest players in the business of issuing branded credit cards for the likes of Amazon, Lowe’s and Wayfair, are keeping the higher rates in place, executives said in recent conference calls.
“We feel pretty comfortable that the rule has been vacated,” Synchrony CEO Brian Doubles said on April 22. “With that said, we don’t currently have plans to roll anything back in terms of the changes that we made.”
His counterpart at Bread, CEO Ralph Andretta, echoed that sentiment, “At this point, we’re not intending to roll back those changes, and we’ve talked to the partners about that.”
The CEOs celebrated the end of a proposed CFPB regulation that was meant to limit what Americans would pay in credit card late fees, an effort that the industry called a misguided and unlawful example of regulatory overreach. Under previous Director Rohit Chopra, the CFPB estimated that its rule would save families $10 billion annually. Instead, it inadvertently saddled borrowers with higher rates and fees for receiving paper statements as credit card companies sought to offset the expected revenue hit.
Retail cards hit a record high average interest rate of 30.5% last year, according to a Bankrate survey, and rates have stayed close to those levels this year.
“The companies have made a windfall,” said David Silberman, a veteran banking attorney who lectures at Yale Law School. “They didn’t think they needed this revenue before except for [the CFPB rule], and they’re now keeping it, which is coming directly out of the consumer’s pocket.”
Synchrony and Bread both easily topped expectations for first-quarter profit, and analysts covering the companies have raised estimates for what they will earn this year, despite concerns about a looming U.S. economic slowdown.
Retailer lifeline
While store cards occupy a relatively small corner of the overall credit card universe, Americans who are struggling financially are more likely to rely on them, and they are a crucial profit generator for popular American retailers.
There were more than 160 million open retail card accounts last year, the CFPB said in a report from December that highlighted risks to users of the high-interest cards.
More than half of the 100 biggest U.S. retailers offer store cards, and brands including Nordstrom and Macy’s relied on them to generate roughly 8% of gross profits in recent years, the CFPB said.
Banks may be taking advantage of the fact that some users of retail cards don’t have the credit profiles to qualify for general-purpose cards from JPMorgan Chase or American Express, for example, said senior Bankrate analyst Ted Rossman.
Nearly half of all retail card applications are submitted by people with subprime or no credit scores, and the card companies behind them approve applications at a higher rate than for general-purpose cards, the CFPB said.
“Companies like Bread or Synchrony, they rely a lot more on people who carry balances or who pay late fees,” Rossman said.
Rates on retail cards have fallen by less than 1% on average since hitting their 2024 peak, and they are typically about 10 percentage points higher than the rates for general-purpose cards, Rossman said.
That means it’s unlikely that other large players in the retail card sector, including Citigroup and Barclays, have rolled back their rate increases in the wake of the CFPB rule’s demise. The most recent published APR on the Macy’s card, issued by Citigroup, is 33.49%, for instance.
Citigroup and Barclays representatives declined to comment for this article.
Debt spirals
Synchrony’s CEO gave some clues as to why banks aren’t eager to roll back the hikes: borrowers either didn’t seem to notice the higher rates, or didn’t feel like they had a choice.
Retail cards are typically advertised online or at the checkout of brick-and-mortar retailers, and often lure users with promotional discounts or rewards points.
“We didn’t see a big reduction in accounts or spend related to the actions” they took last year, Doubles told analysts. “We did a lot of test and control around that.”
Synchrony will discuss future possible changes to its card program with its brand partners, according to a spokeswoman for the Stamford, Connecticut-based bank. That could include bumping up promotional offers at specific retailers, Doubles said during the April conference call.
Brian Doubles, Synchrony President
Synchrony Financial
“Our goal remains to provide access to financial solutions that provide flexibility, utility, and meaningful value to the diverse range of customers, partners, providers, and small and midsized businesses we serve,” Synchrony said in a statement.
A Bread spokesperson declined to comment for this article.
Alaina Fingal, a New Orleans-based financial coach, said she often advises people who’ve been trapped in a debt spiral from using retail credit cards. Some have to take on side gigs, like driving for Uber Eats, to work down the balances, she said.
“They do not understand the terms, and there are a lot of promotional offers that may have deferred interest clauses that are in there,” Fingal said. “It’s extremely predatory.” More
“Everyone says, ‘When, when, when are you going to sign deals?'” Trump said during a White House meeting with Canadian Prime Minister Mark Carney.
After weeks of saying that countries were asking for bilateral trade talks with the U.S., the president and his team have yet to announce any formal agreements or frameworks.
Trump’s effort to deprioritize trade deals marked a turn away from what Treasury Secretary Scott Bessent told CNBC the day before.
“The Art of the Deal” author President Donald Trump said in a surprising comment Tuesday that the United States does not need to “sign deals” with trade partners, despite top White House officials claiming for weeks that such deals are the administration’s top priority.
“Everyone says, ‘When, when, when are you going to sign deals?'” Trump grumbled during a White House meeting with Canadian Prime Minister Mark Carney.
“We don’t have to sign deals, they have to sign deals with us. They want a piece of our market. We don’t want a piece of their market,” Trump said.
After weeks of saying that countries were asking for bilateral trade talks with the United States, the president and his team have yet to announce any formal agreements or frameworks.
“I wish they’d … stop asking, how many deals are you signing this week?” said Trump, clearly frustrated at the mounting pressure on the White House to show progress on trade talks. “Because one day we’ll come and we’ll give you 100 deals,” he said.
Read more CNBC politics coverage
Trump’s effort to deprioritize trade deals Tuesday marked a turn away from what his Treasury secretary, Scott Bessent, told CNBC the day before.
The U.S. is “very close to some deals,” Bessent said on “Money Movers.”
Trump said Sunday on Air Force One that there “could very well be” trade deals rolled out this week. “At the end, I’m setting the deal,” he told reporters en route to Washington.
Trump said Wednesday during a NewsNation town hall that his administration has “potential deals” with India, South Korea and Japan.
On April 29 he said negotiations with India were “coming along great” and the U.S. will “likely have a deal with India.”
On Tuesday, however, Trump blamed top aides such as Bessent and Commerce Secretary Howard Lutnick for overpromising trade deals.
“I think my people haven’t made it clear, we will sign some deals,” said Trump. “But much bigger than that is we’re going to put down the price that people are going to have to pay to shop in the United States. Think of us as a super luxury store, a store that has the goods.”
U.S. markets moved lower Tuesday afternoon after Trump made the comments about deals.
Investors and business leaders are desperately hoping the Trump administration can negotiate a series of bilateral agreements with major U.S. trading partners such as Japan, South Korea and India before the full brunt of the tariff-induced trade slowdown hits the U.S. economy.
But so far, the Trump administration has not provided any details about any specific deals. Instead, nearly every day, top aides publicly say that several deals are “close” and could be announced within days. More
The Federal Reserve heads into its closely watched policy decision Wednesday with a strong incentive to do absolutely nothing.
Market pricing in the futures markets are implying almost no chance of an interest rate cut at this week’s meeting, and only about a 1-in-3 probability of a cut at the June 17-18 session.
Fed Chair Jerome Powell “is going to have to say everything’s on the table. He always says it, but this time, he’s going to have to mean it,” said economist and Fed veteran Vincent Reinhart.
US Federal Reserve Chair Jerome Powell speaks at the Economic Club of Chicago in Chicago, Illinois, on April 16, 2025.
Kamil Krzaczynski | Afp | Getty Images
The Federal Reserve heads into its closely watched policy decision Wednesday with a strong incentive to do absolutely nothing.
Faced with unresolved questions over President Donald Trump’s tariffs and an economy that is signaling both significant strengths and weaknesses, central bank policymakers can do little for now except sit and wait as events unfold.
“It’s going to be awkward at this meeting. The Fed doesn’t have a forecast to convey anything about the next couple meetings,” said Vincent Reinhart, a former long-time Fed official and now chief economist at BNY Investments. “The Fed’s got to wait for two things: It’s to see that the policy actually goes into place … But then, when it’s demonstrated, it’s got to see how inflation expectations react. So that’s why the Fed’s got to delay, then go slow.”
Indeed, futures market pricing is implying almost no chance of an interest rate cut at this week’s meeting, and only about a 1-in-3 probability of a move at the June 17-18 session, according to the CME Group’s FedWatch gauge.
Market expectations have shifted over the past week in response both to mixed economic signals as well as signs that President Donald Trump is getting at least a bit less aggressive in his tariff approach. The White House has signaled that several trade deals are nearing completion, though none have been announced yet.
Reinhart said his firm has two cuts plugged in for this year, a bit tighter of a path than the market expectations for three reductions starting in July. A week ago, markets were betting on as many as four cuts, starting in June.
Direction from Powell
Fed Chair Jerome Powell will be left at his post-meeting news conference to explain the thinking from him and his colleagues on where they see policy heading.
“The other unsatisfying part is they don’t know what they’re going to do in June,” Reinhart said. “So he’s going to have to say everything’s on the table. He always says it, but this time, he’s going to have to mean it.”
Powell, though, is sure to face questioning about how policymakers see the recent barrage of data, which has painted a picture of economy loaded with pessimism from consumers and business executives that has yet to feed into hard numbers such as spending and employment.
While gross domestic product fell at a 0.3% annualized rate in the first quarter, it was largely the product of a surge in imports ahead of Trump’s April 2 tariff announcement. The April nonfarm payrolls report showed that hiring continued at a solid pace, with the economy adding a better-than-expected 177,000 jobs for the month.
At the same time, manufacturing and service sector surveys show deep concern about inflation and supply impacts from tariffs. Also, consumer optimism is at multi-year lows while inflation expectations are at multi-decade highs.
It all adds up to a tightrope for Powell and Co. to walk at least through the June meeting.
No ‘dot plot’ this time
“The Fed is going to project in their statement, in their press conference, patience. Wait to see more data,” said Tony Rodriguez, head of fixed income strategy at Nuveen. “Too much uncertainty to act right now, but prepare to act if they begin to see weakness in the employment market.”
Nuveen also expects just two cuts this year and two more next year as the Fed navigates slowing growth and tariff-fueled price increases.
“Our expectation is you’re going to see nothing at this meeting,” Rodriguez said. “They just need to see more hard data, which we don’t think will become really clear until call it June or July. I would think of the September meeting as being the first cut.”
The Fed at this meeting does not update its economic projections nor its “dot plot” of individual member expectations for interest rates. That will come in June. So the rate-setting Federal Open Market Committee will be left to tweaks in the post-meeting statement and Powell’s news conference to drop any possible hints of its collective thinking.
“We think it will take a couple of months for enough hard data evidence to accumulate to make the case for a cut,” Goldman Sachs economist David Mericle said in a note. Goldman expects the Fed to cut in July, September and October in an effort to head off economic weakness, which the firm expects to take priority over inflation concerns.
One wild card in the equation: Trump, as he did during his first term, has been urging the Fed to cut rates as inflation edges closer to the central bank’s 2% objective.
However, Reinhart, the BNY economist, does not see the Fed bending to Trump’s will nor breaking ranks despite public statements from some members showing division on policy.
“The White House has done Jay Powell a favor in keeping his committee together. Because generally, when a family is criticized from from the outside, it’s less willing to criticize each other,” Reinhart said. “Do you criticize Jay Powell now and line yourself up the president? Probably not, if you worked your whole life in the Federal Reserve system.” More
Stockmarkets appear to have recovered their poise. By May 2nd America’s S&P 500 index had climbed back to its level of a month earlier, just before President Donald Trump’s “Liberation Day” tariff salvo. If the S&P’s plunge was shocking—a fall of 12% in just four trading days—the rebound was, too. Mr Trump’s decision to pause many of his duties certainly helped. So, it seems, did retail investors. More
“We’ll probably go down to new lows, even when Trump dials back China to 50%,” Jones told CNBC’s “Squawk Box.”
The widely followed investor’s bearish comments came after Trump’s rollout of the highest levies on imports in generations shocked the world last month, triggering extreme volatility on Wall Street.
Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.
Adam Galica | CNBC
Billionaire hedge-fund manager Paul Tudor Jones said Tuesday stocks are bound to hit new lows even if President Donald Trump tones down his aggressive tariffs on China.
“For me, it’s pretty clear. You have Trump who’s locked in on tariffs. You have the Fed who’s locked in on not cutting rates. That’s not good for the stock market,” Jones said on CNBC’s “Squawk Box.” “We’ll probably go down to new lows, even when Trump dials back China to 50%.”
The widely followed investor’s bearish comments came after Trump’s rollout of the highest levies on imports in generations shocked the world last month, triggering extreme volatility on Wall Street. The S&P 500 suffered a severe sell-off but has since recouped much of the losses, sitting 8% below its all-time high.
Trump has slapped tariffs of 145% on imported Chinese goods this year, prompting China to impose retaliatory levies of 125%. China said last week it is evaluating the possibility of starting trade negotiations with the U.S.
“He’ll dial it back to 50% or 40%, whatever. Even when he does that … it’d be the largest tax increases since the 60s,” Jones said. “So you can kind of take 2%, 3% off growth.”
Jones, the founder and chief investment officer of Tudor Investment, believes stocks haven’t found a bottom as macroeconomic conditions continue to deteriorate. The Fed has held its key overnight lending rate steady since December in a range between 4.25% and 4.5%. Fed Chair Jerome Powell has said he expects policymakers to “wait for greater clarity” on trade policy ramifications before adjusting any further.
“Unless they got really dovish and really, really cut, you’re probably gonna go to new lows,” Jones said. “And then when we’re new lows, the hard day will start to follow, and it’ll probably create the Fed to move, create Trump to move. And then we’ll get some kind of reality.”
Jones shot to fame after he predicted and profited from the 1987 stock market crash. He is also the chairman of nonprofit Just Capital, which ranks public U.S. companies based on social and environmental metrics. More
Consumers are seeing prices fall in certain pockets of the U.S. economy, even as the overall inflation rate remains elevated.
Airline fares, produce, consumer electronics and energy are among the broad categories seeing declines, according to the consumer price index.
President Donald Trump said Friday that gasoline prices had dipped to $1.98 per gallon. However, that claim isn’t true: The retail gas price is more than $3 a gallon.
People line up at departures gates in Los Angeles International Airport.
Daniel Slim | Afp | Getty Images
Even though inflation hasn’t yet declined to policymakers’ target level, some pockets of the U.S. economy have seen prices fall recently.
Consumers have seen prices deflate for airfare, produce, household goods, electronics and gasoline, for example, according to the consumer price index, an inflation gauge. (Deflation is when prices decline, while disinflation is when prices continue to grow but at a slower pace.)
“There are a lot of idiosyncratic factors affecting certain categories,” said Ryan Sweet, chief U.S. economist at Oxford Economics. “In the end, it’s supply and demand that will affect prices.”
Of course, some categories are volatile and prone to extreme price gyrations — meaning price declines could quickly reverse. Tariffs also threaten to roil the picture and put upward pressure on many consumer prices.
“Consumers should enjoy these lower prices, because they’re not here to stay,” said Mark Zandi, chief economist at Moody’s. “They’re going away pretty quickly, I think, over the next few weeks and months.”
Here are some areas where consumers have seen a bit less stress on their wallets lately.
Gasoline
President Donald Trump claimed in a social media post Friday that gas prices had dipped to $1.98 per gallon for motorists. However, that claim isn’t true: The average retail gas price is more than $3 a gallon , according to the US. Energy Information Administration.
However, prices have broadly declined in the past year.
Gasoline prices are down almost 10% from a year ago, according to the latest CPI data. They fell about 6% just in the month from February to March, on a seasonally adjusted basis, the data shows.
Oil prices have a large bearing on the prices consumers pay at the pump, since gasoline is refined from oil.
Crude oil prices have fallen significantly. For example, futures prices for West Texas Intermediate, a U.S. oil benchmark, are down 22% over the past year.
Lower prices signal fears that the U.S. economy is slowing down, which would mean less demand for oil, Sweet said. Meanwhile, a group of oil-producing nations known OPEC+ agreed to raise production over the weekend, weakening prices amid greater supply.
“Prices can’t go much lower for very long or [oil] producers will start pulling back production,” Zandi said.
Airline fares
Lower oil prices are filtering through to many other areas of the economy, Zandi said.
Airline fares are one example, economists said.
Prices for airline tickets are down more than 5% from a year ago, according to CPI data. They fell about 5.3% in the month from February to March.
Jet fuel is a major input cost for airlines; jet fuel prices are down about 15% in the year through April 25, according to the International Air Transport Association.
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Weaker travel demand, particularly from international tourists to the U.S., has also put downward pressure on fares, economists said.
International visits to the U.S. fell about 14% in March 2025 from a year earlier, according to the U.S. Travel Association.
The international community is wary of traveling to the U.S. due to tensions from a U.S.-initiated trade war, and territorial declarations from the White House such as Canada becoming the 51st state or about a possible takeover of Greenland, economists said. People also fear the threat of being detained when entering the country, economists said.
Produce
A farm worker carries a bin with tomatoes in Immokalee, Florida.
Eva Marie Uzcategui for The Washington Post via Getty Images
Produce like tomatoes, lettuce and potatoes have seen sharp price declines.
Tomatoes, for example, have seen prices fall about 8% in the past year, according to CPI data. Those of lettuce and potatoes have pulled back about 5% and 2%, respectively.
Lower costs for diesel fuel — and, by extension, lower transportation costs from farm to grocery store shelf — have helped, economists said.
There are also seasonal supply-and-demand factors at play, they said.
“Tomato supplies are increasing as the Florida harvest is well underway,” Brad Rubin, sector manager at the Wells Fargo Agri-Food Institute, wrote in an e-mail. “The Mexico spring harvest is also plentiful in Culiacan. This includes round, Roma, and snacking tomato varieties.”
Tomatoes imported from Mexico will face new tariffs starting in mid-July, however, following a Trump administration withdrawal from a trade agreement between the two nations.
The lettuce crop has transitioned to Salinas, California, for the spring and the harvest has “plentiful yield and high quality,” Rubin wrote. The crop generally transitions to Yuma, Arizona, from November to April, but “production challenges” through the winter put upward pressure on prices, he wrote.
TVs, smartphones and other goods
Televisions and smartphones have seen prices fall 9% and 14% in the past year, according to CPI data. They each declined more than 1% in the month from February to March.
It’s common to see prices deflate for consumer electronics, because companies can generally make products like TVs and iPhones more efficiently over time, Sweet said.
“The flat screen TV you may have bought five years ago is a lot cheaper if you go out today,” he said. “That’s normal.”
Technology continually improves, meaning consumers get more for their money. The Bureau of Labor Statistics, which compiles CPI data, treats those quality improvements as a price decline, giving the illusion of falling prices on paper.
The reasons for price declines in other categories can be somewhat hard to pin down, economists said.
For example, certain household goods like dishes and flatware, sporting goods, and toys saw prices fall about 11%, 5% and 2%, respectively, in the past year. Similarly, segments of the clothing market like infants’ and toddlers’ apparel fell 4%.
Apparel, for example, can be “very seasonal,” Sweet said.
“It could be weather or the timing of certain holidays,” he said. “All of that can throw apparel prices for a loop.”
A potential explanation, Zandi said, is retailers who tried stockpiling certain goods in anticipation of tariffs may have bulked up their inventories more than expected, and may be pricing those goods more aggressively to reduce those inventories, he said. More
