🏛️ FOMC Meeting Summary — July, 2025

The Federal Open Market Committee voted 9–2 today to keep the federal funds rate at 4.25%–4.50%, unchanged for the fifth consecutive meeting . Despite mounting pressure from former President Trump to cut rates, Fed Chair Jerome Powell reaffirmed the Fed’s independence, stressing the decision reflects elevated inflation and a cautious, data-driven approach .

Highlights:

Economic activity “moderated” in the first half of 2025, shifting language from “solid pace” in prior statements .

Inflation remains above the 2% target—core PCE rose ~2.7%, headline PCE ~2.5% as of June .

Labor markets show strength; unemployment remains low, supporting the dual mandate .

Powell noted risks tied to tariffs, warning that price shocks could become persistent inflation if unchecked .

This meeting also marked the first dissent by two governors—Michelle Bowman and Christopher Waller—in over 30 years, both favoring an immediate quarter-point cut . Powell described the internal debate as constructive, underscoring a “two-sided” risk environment of inflation vs. economic softness .

Markets reacted modestly: the S&P 500 slipped ~0.4%, Treasury yields ticked higher, and probability of a September rate cut dropped below 50% .

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💡 Takeaway:

The Fed remains committed to price stability and employment goals, maintaining a cautious stance. A rate cut in September is not ruled out but now hinges on incoming data on inflation and employment.