FOMC Meeting: Fed Holds Rates Steady for Fifth Straight Meeting

As expected, the Federal Reserve has again decided to leave interest rates unchanged following the July FOMC meeting. This comes despite calls from Donald Trump and some market experts for the Fed to begin easing monetary policies.

Fed Leaves Rates Unchanged Following FOMC Meeting

In a press release, the Fed announced that it has decided to maintain the target range for the federal funds rate at 4.25% to 4.5%. The Committee added that it will continue to assess incoming data to determine when to adjust the interest rates.

This decision comes in line with market expectations, with CoinGape reporting earlier that there was a 98% likelihood that the Fed rates would remain unchanged following the FOMC meeting. This marks the fifth consecutive meeting that the Committee has decided to hold rates steady following the January, March, May, and June meetings.

The Fed voted nine to two in favor of keeping rates unchanged. Governors Christopher Waller and Michelle Bowman voted in favor of a 25-basis-point rate cut. CoinGape had reported earlier today that the duo were likely to dissent from the possible interest rate decision.

Up until the latest meeting, U.S. President Donald Trump has continued to urge Jerome Powell and the Committee to lower rates. Just hours before the meeting, the president remarked that Powell must lower rates now as the GDP figures came in better than expected.

However, the FOMC meeting release suggests that the Fed is still skeptical of the negative impact that the Trump tariffs could have on inflation. As such, they are choosing to wait and see how it all plays out.

Following the latest Fed decision, the market will not turn its attention to Powell’s speech for guidance on whether the Committee is likely to cut rates in the latter parts of the year. The next meeting is between September 16 and 17. Meanwhile, there are subsequent meetings in October and December.

Powell Will Cut Rates In September

During a press briefing, Donald Trump stated that he had heard that the Fed would cut rates at its September FOMC meeting. This came as he admitted that a rate cut was unlikely even before the decision came out.

The president also remarked that the current economic data is consistent with a rate cut. He added that the U.S. economy is booming and that a rate cut would only further elevate the economy. He also noted how the Fed has been slow to act while the European Central Bank has cut rates several times over the last year.

CME FedWatch data shows that there is a 63.7% chance that the Fed will cut rates at the September FOMC meeting by 25 bps. This will bring the interest rate to between 4% and 4.25%. Meanwhile, there is a 44.4% chance that the Fed will lower rates again at the December meeting. However, traders are currently betting against a cut at the October meeting.