The U.S. Central Bank warns that President Donald Trump's tariffs have created "so much uncertainty" that it is uncertain how to deal with interest rates.

The Fed announced Wednesday that interest rates will remain unchanged despite pressure from Trump to lower borrowing costs.

But Fed Chairman Jerome Powell said the economic impact of Trump’s tariffs mean what banks should do next.

The decision was the third consecutive no action decision, leaving the bank's main loan interest rate hovering around 4.3%.

Typically, if the Fed thinks the economy is struggling and if the price starts too fast, the fee rate is lowered.

But the bank’s tariffs proposed by banks that have made policies independent of the White House increase the risk of a slowdown and faster price increases, complicating its next move.

"It's really not clear what we should do," Fed chairman Jerome Powell said Wednesday. "There's a lot of uncertainty."

Wednesday's decision was the first since the Federal Reserve issued its tariff announcement last month, raising import taxes on goods from countries around the world, with import tax rates from China at least 145%.

U.S. logistics companies and ports have since reported a sharp decline in trade, and analysts warn that the risk of recession has increased significantly since the beginning of the year.

Trump, who promised to lower interest rates when he ran for reelection last year, called on the Fed to "preemptively" lower interest rates and flirted with firing the bank's head, criticizing him as "the main loser" and "sir too late," because he didn't lower rates quickly enough.

The European Central Bank lowered interest rates last month, citing the economy caused by trade tensions. The Bank of England is widely expected to take similar steps this week.

Officials from the U.S. and China will meet this week, but the scope of the negotiations is unclear. Trump on Wednesday dismissed the idea of ​​preemptive tax rates to help trade negotiations.

Powell said the nature of these conversations has the potential to change the economy “substantively”.

"Often things are clear and the proper direction becomes clear," he said. "It's hard to say what that is now. At the same time, the economy is in good shape."

Since 2022, the U.S. economy has shrunk in the first three months of the year. But officials say the numbers have been distorted by companies that have rushed to tariffs before companies rushing goods into the country rather than wider activity declined.

Last month, recruitment performed unexpectedly strongly, bringing unemployment near its historic low of 4.2%, while the sharp decline of the U.S. stock market recovered significantly last month.