The Federal Reserve held interest rates steady Wednesday and kept its forecast for two cuts in 2025 as officials struggled to respond to the double-barreled threats spawned by President Donald Trump’s widening trade war – rising inflation and a slowing economy.

The Federal Reserve maintained its previously expected pace of rate cuts but signaled higher inflation and a slowdown in economic growth for 2025.

A new set of economic projections will give the clearest sense to date of how officials think President Trump’s agenda will impact the economy.

Consumer confidence is waning, and more Americans doubt they will be able to get the credit they need to pay for big purchases and cover everyday costs. Fewer people feel secure in their current jobs, and unemployed job seekers need more time to land a new job.

Officials said they expect GDP growth of 1.7% in 2025, down from their December projections of 2.1%. They also indicated they expect inflation to rise as tariff threats multiply.

The dollar rose across the board on Wednesday, bouncing back from multi-month lows as traders eyed the Federal Reserve's meeting outcome later in the day for clues to the path of U.S. interest rates.