The US Federal Reserve opted to keep interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday (Jul 30), resisting public pressure from President Donald Trump to ease borrowing costs further. The decision, however, was not unanimous, with two Fed governors dissenting.
The Federal Open Market Committee (FOMC) maintained the benchmark interest rate at 4.25% to 4.50%, following three rate cuts earlier in 2024—the last occurring in December.
President Trump had openly called for additional rate cuts, arguing they were necessary to boost economic growth and counter global trade pressures. However, Fed Chair Jerome Powell emphasized that the current rate level remained appropriate given recent data on inflation and employment.
“While inflation has moderated somewhat, it remains above our target. We will continue to monitor the data and remain prepared to adjust policy as needed,” Powell said at a post-meeting press conference.
Two members of the FOMC dissented, favouring a further cut to support economic momentum. Despite the internal disagreement, the majority of policymakers believe that the economy is on solid footing, citing resilient labor markets and steady—if uneven—growth.
Recent economic data has shown signs of strength, including a stronger-than-expected 3.0% GDP rebound in Q2, though economists note that much of that was due to reduced imports rather than robust domestic demand.
Markets are now closely watching upcoming inflation indicators and employment data for clues on the Fed’s next move. Analysts remain divided on whether the central bank will resume easing later in the year or maintain its current stance amid persistent inflation risks.
