Central bank holds key rate at 4.3% for fifth time this year.

The Federal Reserve left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.

The Fed’s decision Wednesday leaves its key short-term rate at about 4.3%, where it has stood after the central bank made three cuts last year. During a news conference, Chair Jerome Powell said that Trump’s sweeping tariffs are starting to push up inflation, and it will take time for the Fed to determine whether the uptick in prices will be a one-time effect or something more persistent.

“That is a risk to be assessed and managed,” he told reporters.

There were signs of splits in the Fed’s ranks: Governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs, while nine officials, including Powell, favored standing pat. It is the first time in more than three decades that two of the seven Washington-based governors have dissented. One official, Governor Adriana Kugler, was absent and didn’t vote.

The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and the White House, as Trump has repeatedly demanded the central bank reduce borrowing costs as part of his effort to assert control over one of the few remaining independent federal agencies.

Powell said that while tariffs are starting to push up the cost of goods — and he expects more of that to happen in the coming months — the price of services such as rents, insurance and hotel rooms has continued to cool.

He suggested it could take time to determine whether the impact of the tariffs will be short-lived or more persistent.

“We think we have a long way to go to really understand exactly how” the tariffs and prices will play out, Powell said.

Many economists and Wall Street investors had expected the Fed to cut its rate at its next meeting in September, but Powell’s remarks suggest there may not be enough data before then to support a cut.

“We have made no decisions about September,” Powell said. The chair acknowledged that if the Fed cut its rate too soon, inflation could rise, and if it cut too late, then the job market could suffer.