Seoul: The U.S. Federal Reserve has decided to keep its benchmark interest rate unchanged for the third consecutive time, citing increased economic uncertainty and rising risks of higher unemployment and inflation. The decision was announced on Wednesday following a two-day meeting of the Federal Open Market Committee (FOMC).

According to Yonhap News Agency, the central bank's decision to maintain the key rate within the 4.25-4.50 percent range comes despite U.S. President Donald Trump's calls for a reduction. This pause follows previous rate cuts in December, with the Fed having refrained from further reductions in both January and March.

The Fed's decision appears to reflect a cautious approach as it continues to assess the impact of President Trump's tariff policies on the U.S. economy. The central bank's press release highlighted the heightened uncertainty surrounding the economic outlook and the potential risks to its dual mandate of achieving maximum employment and maintaining inflation at a 2 percent target over the long term.

In light of these concerns, the Fed is closely monitoring the situation, particularly as the Trump administration implements a baseline 10 percent tariff on most U.S. imports and 25 percent levies on steel, aluminum, and autos. These measures, however, come with a pause on steep "reciprocal" tariffs until July 8, allowing time for negotiations with trading partners.

This latest interest rate decision creates a disparity of up to 1.75 percentage points between the key rates of South Korea and the United States. The Fed has projected two rate cuts for this year, a reduction from the four cuts anticipated last September.