#PowellWatch

As of the latest updates, the Federal Reserve has maintained its benchmark interest rate unchanged at a range of 4.25% to 4.5%, a decision made during its July 2025 meeting, marking the fifth consecutive time rates have been held steady. This reflects a cautious stance amid ongoing uncertainty, particularly due to the impact of tariffs and elevated inflation, which remains above the Fed's 2% target. Fed Chair Jerome Powell has emphasized a "wait-and-see" approach, noting that no decisions have been made regarding a potential rate cut at the next meeting in September. However, recent economic data, including softer job numbers and moderate inflation increases in July, has led to speculation of a near-certain rate cut in September, with probabilities estimated at around 92-100% based on market sentiment and statements from figures like Treasury Secretary Scott Bessent, who suggested a possible half-point cut.

The July decision saw rare dissents from Governors Michelle Bowman and Christopher Waller, both Trump appointees, who favored a 0.25% rate cut, highlighting internal divisions over the labor market's health and inflation control. Powell has indicated that future decisions will hinge on incoming data, including employment and inflation reports expected before the September meeting. While the Fed held rates steady in July, the evolving economic landscape—softening labor market data and tariff effects—suggests a shift may be nearing, though no definitive action has been confirmed as of August 19, 2025.