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 projections underscore the tight spot the Fed may find itself in this year: Higher inflation typically would lead the Fed to keep its key rate elevated, or even raise rates. On the other hand, slower growth and higher unemployment would often cause the Fed to cut rates to spur more borrowing and spending and lift the economy.

The central bank penciled in two rate cuts for 2025, but President Trump’s sweeping agenda has injected “remarkably high” uncertainty into the outlook.

Investors and economists hoping for news from the Federal Open Market Committee are in luck. The Federal Reserve's policymaking arm will announce its decision on interest rates at 2 p.m. Eastern time and release an updated Summary of Economic Projections.