Fed Holds Rates Steady Amid Trade Uncertainty; UK Trade Deal Boosts Pound

The US Federal Reserve maintained the federal funds rate at 4.25%-4.50%, signaling a cautious approach due to trade concerns. Officials cited rising risks to both inflation and unemployment. Fed Chair Jerome Powell emphasized uncertainty, stating that both rate cuts and pauses are possible. US equity markets initially dipped but rebounded during Powell's press conference. The US dollar strengthened slightly, while gold declined. Markets now price a lower chance of a June rate cut but still expect three cuts in 2025. President Trump announced a potential trade deal with the UK, boosting the British pound by 0.4% against the US dollar. US stock futures and Asian equity markets responded positively to the trade news. Gold rebounded, indicating lingering market caution.