The US central bank, the Federal Reserve, did not change its main interest rate on Wednesday, ignoring calls from President Donald Trump to make borrowing cheaper. They also said that the chances of more people losing their jobs and prices going up have both increased. This is a strange situation that makes it hard for the central bank to decide what to do.

The US central bank kept its interest rate at 4.3% for the third meeting in a row, after lowering it three times at the end of last year. Many experts and investors still think the central bank will lower rates this year. However, the high taxes Trump put on imports have made the US economy and the bank's plans very uncertain.

After the new policy was announced, the head of the Federal Reserve, Jerome Powell, said in a press conference that the tariffs have made consumers and businesses feel less confident. However, he added that they haven't really damaged the economy yet. Powell also mentioned that right now, the situation is too uncertain to know how the Fed should respond to the tariffs.

Powell said that if the big increases in taxes on imports continue, they will likely cause prices to go up, the economy to grow more slowly, and more people to lose their jobs. He added that these effects could be short-lived or last for a longer time.

It's unusual for the US central bank (the Fed) to have to deal with both rising prices and more people losing their jobs. Usually, prices go up when people are spending a lot and businesses can't keep up, so they increase prices, like after the pandemic. But when the economy is weak, people usually spend less, which often leads to more job losses and slower price increases.

When both unemployment and inflation increase, it's often called "stagflation." This situation makes central bankers very concerned because it's hard for them to solve both issues at once. It last happened for a long period in the 1970s during the oil crisis and economic downturns.

However, most economists think that Trump's big tariffs might lead to stagflation.

The Federal Reserve wants to keep prices stable and help people find jobs. When prices go up, the Fed usually increases interest rates to make borrowing and spending slower and control inflation. But if companies fire workers, the Fed might lower interest rates to encourage more spending and help the economy grow.

At the start of the year, experts and investors expected the central bank to lower interest rates a few times because inflation was decreasing after the pandemic. Some economists also think the central bank should cut rates now because they expect the economy to grow more slowly and unemployment to get worse due to new taxes on imported goods. However, the head of the central bank firmly stated that since the economy is currently strong, they can wait and see.

Several months ago, many experts thought the economy would have a smooth period where prices would stop rising quickly and unemployment would stay low, with good economic growth.

However, on Wednesday Powell said that was not likely to happen.

Powell said that if the tariffs are finally set at those levels, they will not make more progress towards their goals, at least for the next year, if that is how the tariffs end up.

Powell also said the Fed's next step will depend partly on whether prices go up more or if more people lose their jobs.

"Depending on how the situation develops, we might lower rates, or we might keep them the same. We need to see what happens before we decide," he said.

Krishna Guha, an expert, said the Fed's current opinion means they will probably cut interest rates later. He explained that the Fed sees both good and bad possibilities and believes the economy is strong. This shows the Fed is not planning to cut rates in June right now. Many economists believe the Fed might wait until September to cut rates.

In April, Trump said he would put big new taxes on goods from about 60 countries that trade with the U.S. But he stopped most of these taxes for three months, except for taxes on goods from China.

The central bank's careful approach might cause more disagreement between the Fed and the Trump government.

At the press conference, when asked if Trump's calls for lower rates affected the Fed, Powell replied, "It doesn't change how we do our job. We only consider economic data, the future outlook, and the risks involved. That's all."

If the central bank lowers interest rates, it could make it cheaper to borrow money for things like houses, cars, and credit cards, but this is not certain.

A big problem for the Fed is how tariffs will affect inflation.

Currently, the U.S. economy is generally strong, and the rate of price increases has gone down a lot since the highest point in 2022. People are spending money quite freely, although this might partly be because they are buying things like cars before new taxes are added. Companies are still hiring people regularly, and there are not many people without jobs.

However, it seems inflation will get worse soon. Surveys of businesses that make and sell things show they are paying more for supplies. Also, a survey found that about 55% of companies that make things plan to charge customers more because of higher taxes on imports.