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Highlights
- There is a 96.9% chance that the Fed will hold rates steady at the July FOMC meeting.
- Donald Trump again called for a Fed rate cut today.
- Traders are still betting on two fed rate cuts this year.
Ahead of the FOMC meeting holding between July 29 and 30, U.S. President Donald Trump has again urged the Fed to lower rates. However, the odds are in favor of Jerome Powell and the Committee holding rates for the fifth consecutive time this year.
Fed To Keep Rates Unchanged At July 30 FOMC Meeting
CME FedWatch data shows that there is a 96.9% chance that the Federal Reserve will keep rates unchanged at the July 30 Fed meeting. If that happens, it will mark the fifth consecutive time this year that the Committee is opting against lowering rates.
The Fed Interest has remained between 4.25% and 4.5% following the January, March, May, and June FOMC meetings. Powell and the Committee have, up to now, emphasized that it is best to wait and see the impact of economic policies, such as the Trump tariffs, on inflation.
The Fed has maintained its stance so far, despite persistent calls from the president for it to lower rates. During his visit to the Federal Reserve last week, Trump again urged Powell to cut interest rates, noting that the U.S. economy is currently booming.
Meanwhile, during a press briefing today, while on his visit to Scotland, Trump stated that the Fed has to cut rates. He noted that the economy is doing so well without a rate cut, but will do even better if one happens. He again criticized Powell, saying that a smart person would move to cut rates.
Besides Trump, some market experts have also opined that it is appropriate for the Fed to make a rate cut. As CoinGape reported, ahead of the FOMC meeting, BlackRock CIO Rick Rieder argued that a cut will usher in lower house prices and reduce inflation rates.
Two Rate Cuts Still Likely This Year
Polymarket data shows that there is a 38% chance of two Fed rate cuts this year, despite rates likely to remain unchanged at the upcoming FOMC meeting. Meanwhile, there is a 23% chance of one rate cut and a 20% chance of zero cuts this year.
There is also a 10% chance of three Fed rate cuts this year. This remains a possibility even if there is no rate cut at this July Fed meeting since there are three meetings after this, holding in September, October, and December.
Powell’s speech following this July FOMC meeting and the meeting minutes will provide guidance on where the Fed currently stands, and if they are open to a rate cut in the latter part of the year.
San Francisco Federal Reserve President Mary Daly recently made a case for two rate cuts this year, describing the outlook as ‘reasonable.’ She suggested that it was best to hold rates at this July Fed meeting, but warned that they shouldn’t hold rates for too long, as it could hurt the economy.
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