The Federal Reserve did not change its main interest rate on Wednesday. President Trump wanted them to lower it, but they did not. They said it is more likely that more people will lose their jobs and prices will go up. This is a strange situation and makes it difficult for the central bank to make decisions.

The Fed kept the interest rate at 4.3% for the third time. They had lowered it three times at the end of last year. Many experts and investors still think the Fed will lower rates this year. But the new taxes on goods from other countries that Trump added have made the US economy and the Fed's plans very unclear.

After the government shared its plans, Jerome Powell, who is in charge, talked to reporters. He said the new taxes have made people and businesses feel less positive. But he also said the taxes haven't really hurt the economy yet. Powell explained that right now, things are not clear enough to know what the central bank should do about the taxes.

"If the big increases in taxes on imports stay, they will probably make prices go up, the economy grow slower, and more people lose their jobs," Powell said. He also said the effects could be short or long.

It's not common for the Fed to have problems with both prices going up and more people losing their jobs at the same time. Usually, prices go up when people are buying a lot and companies can't make enough things, so they ask for more money, like after the pandemic. But when more people lose their jobs, the economy is not as strong, people spend less money, and prices don't go up so quickly.

When prices go up fast and many people don't have jobs, it's called 'stagflation'. This is a big problem for the people in charge of money because it's hard to fix both things at once. It happened for a long time in the 1970s when oil cost a lot and the economy was weak.

But many experts say Trump's taxes on things from other countries could cause a problem called stagflation. These taxes could make prices go up for things from other countries, and also make companies fire workers because their costs get higher.

The main jobs of the Fed are to keep prices steady and help people find jobs. When prices go up, the Fed usually makes borrowing money more expensive. This makes people spend less, which helps prices stop going up so fast. If companies fire people, the Fed might make borrowing money cheaper. This helps people spend more, which helps businesses grow and people keep their jobs.

At the start of the year, experts thought the US Federal Reserve would lower interest rates a few times because prices were not rising as quickly. Some also thought the Fed should cut rates because they expected the economy to grow more slowly and more people to lose jobs. But the head of the Fed said clearly that because the economy is good now, they can wait.

A few months ago, many experts thought the economy would get better slowly. They thought prices would fall to the right level, and people would keep their jobs. They also thought the economy would grow well.

But on Wednesday, Powell said that would probably not happen.

If the taxes are put in place like that, then we won't get closer to our goals, Powell said. For about a year, we would not make progress towards those goals, if that is how the taxes end up.

Powell also said the Fed's next step depends on if prices go up a lot or if more people lose their jobs.

He said, "We need to see what happens. We might lower the rates, or we might keep them the same. We will decide after we see what happens."

Krishna Guha, an expert, said the Fed thinks the economy is strong. This means they probably won't lower interest rates soon. He said because they see good and bad things that could happen and think the economy is doing well, they probably won't lower rates in June. Many experts think the Fed might wait until September to lower rates.

In April, Trump said he would put taxes on goods from many countries. But he stopped most of these taxes for 90 days, except for those on China. The government put a 145% tax on goods from China. This weekend in Switzerland, the US and China will have important talks for the first time since Trump started the trade problem.

The central bank is being careful. This could cause more problems between the central bank and the President. The President said on TV that the central bank should lower interest rates. The President is not saying he will try to fire the head of the central bank now. But he might change his mind if the economy has problems soon.

When asked if Trump's requests for lower interest rates changed their work, Powell said, "It doesn't change how we do our job. We will always think only about the economy's information, what might happen in the future, the possible problems, and nothing else."

If the central bank lowers interest rates, it might make loans cheaper for things like houses, cars, and credit cards, but this won't definitely happen.

A big problem for the Fed is how import taxes will change prices. Most experts think these taxes will make things more expensive, but they don't know how much or for how long. Usually, these taxes make prices go up one time, but not always.

Right now, the U.S. economy is doing well. Prices are not going up as fast as they were in 2022. People are buying a lot, maybe even cars before new taxes. Companies are still hiring, and few people are without jobs.

But, it looks like prices will go up more in the next few months.