🇺🇸 Federal Reserve Holds Rates Steady — No Cut in July 2025
No rate cut announced at the FOMC meeting on July 29–30. The federal funds rate remains at 4.25%–4.50%, unchanged for the fifth consecutive time, in line with market expectations.
Inflation concerns persist—June’s CPI rose to about 2.7%, above the Fed’s 2% target, amplified by tariff-driven price pressure. The labor market stays strong, with unemployment near 4.1%.
Internal dissent brewing: Two Fed governors—Christopher Waller and Michelle Bowman—signaled support for a 25-basis-point cut at this meeting, which would mark the first dual dissent in over three decades.
Political pressure heats up: President Trump has called for aggressive cuts and criticized Powell’s leadership and renovation spending. Despite this, most policymakers remain cautious, citing economic uncertainty.
What lies ahead: Markets now look to September as the more likely time for initial rate cuts—futures pricing suggests two cuts in 2025. But the Fed emphasizes data‑dependence before acting.
Investors respond: Bond markets view the policy as supportive of a “Goldilocks” economy—neither overheating nor too weak. Corporate bond spreads are tightening amid growing confidence.
📌 Quick Take
The Federal Reserve opted to keep interest rates steady during its July meeting, prioritizing data-driven caution amid inflationary risks and economic uncertainty. While political pressure mounts and internal divisions emerge, Chair Powell reaffirmed the Fed’s commitment to its dual mandate over expedient rate cuts.