Overview

• The Fed has held its benchmark rate at 4.25–4.50% for five straight meetings and now expects just one quarter-point reduction this year.
• Atlanta Fed’s Raphael Bostic highlighted that tariffs have boosted the average effective rate fivefold since January and are mounting cost pressures on small businesses.
• Uncertainty from President Trump’s expanded tariffs is curbing hiring and investment, with Bostic warning of continued economic slowdown.
• Policymakers will await next week’s consumer price index and the August jobs report before considering broader easing at the September 16-17 meeting.
• A split has emerged on the Federal Open Market Committee as Governor Christopher Waller argues tariffs will cause only one-time price jumps and supports earlier rate cuts.