Federal Reserve likely to maintain key rate

WASHINGTON — The Federal Reserve will likely keep its key short-term interest rate unchanged on Wednesday, despite weeks of harsh criticism and demands from President Donald Trump that the Fed reduce borrowing costs.

After causing a sharp drop in financial markets two weeks ago by saying he could fire Fed Chair Jerome Powell, Trump subsequently backed off and said he had no intention of doing so. Still, he and Treasury Secretary Scott Bessent say the Fed should cut rates.

They argue that inflation has steadily cooled and high borrowing costs are no longer needed. Inflation did drop in March, though in the first three months of the year it was 3.6%, well above the Fed's 2% target.