Overview

• The FOMC left its target federal funds rate at 4.25%–4.50% for a fifth straight meeting, citing elevated inflation and a solid labor market.
• Governors Michelle Bowman and Christopher Waller lodged the first two-member dissent since 1993, favoring a quarter-point rate cut at this meeting.
• Chair Jerome Powell rejected President Trump’s calls for aggressive easing, stating that economic data do not indicate policy is unduly restrictive.
• US GDP rebounded at an annualized 3% pace in Q2, but tariff-induced price pressures and cautious consumer sentiment keep policymakers vigilant.
• Treasury yields rose and the dollar strengthened after the decision, and investors now price roughly even odds of a September rate reduction ahead of today’s PCE inflation report.