The Federal Reserve voted on July 30 to keep its benchmark interest rate unchanged at 4.25% to 4.50%, marking the fifth consecutive meeting without a change. Chair Jerome Powell said the move was necessary to maintain pressure on inflation, which remains above the central bank’s 2% target. The decision comes despite public calls from President Donald Trump to immediately lower rates to spur borrowing and economic growth.
The Federal Open Market Committee voted 9–2 to hold rates steady, with Governors Michelle Bowman and Christopher Waller dissenting in favor of a 0.25‑point cut. Both are Trump appointees, making this the first time since 1993 that more than one governor has dissented on a rate decision. Powell defended the decision, stating the current rate level is appropriate to balance inflation risks while keeping the economy stable.
Economic data played a key role in the Fed’s decision. GDP growth slowed during the first half of 2025, though unemployment remains low and the labor market strong. Powell noted that tariffs under Trump administration trade policies have added upward pressure on goods prices, complicating the inflation picture. Holding rates steady, he said, allows the central bank flexibility to respond quickly if economic conditions shift.
The dissent by Bowman and Waller highlights growing debate within the Fed over whether policy is too restrictive. Both argued that high borrowing costs could slow economic momentum at a time when some sectors are already cooling. Their stance aligns with Trump’s calls for lower rates, though Powell emphasized the Fed’s independence from political influence.
Despite the internal split, the majority of the committee signaled that the current rate range would remain until there is clearer evidence of sustained progress on inflation. Powell reiterated that the Fed’s decisions would continue to be guided by data, with a focus on maintaining price stability and supporting maximum employment.
