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2h ago

Fed Holds Rates Steady and Flags Possible July Cut with Officials Divided

Officials remain split on whether to ease policy this summer with tariff-driven price uncertainty leaving the Fed cautious ahead of July's meeting

U.S. President Donald Trump looks on as Jerome Powell, his nominee to lead the U.S. Federal Reserve moves to the podium at the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria/File Photo

Overview

  • The Federal Open Market Committee left its benchmark rate at 4.25%–4.50% for the fourth consecutive meeting to await clearer data on inflation and trade impacts.
  • Governor Christopher Waller broke from the consensus by saying the Fed could begin cutting interest rates as soon as July, viewing tariff effects as a one-off price shock.
  • Chair Jerome Powell urged patience, stressing that the central bank is well positioned to respond once the full impact of tariffs and global risks is known.
  • New Fed projections expose a deep divide, with over one-third of officials forecasting two or more cuts this year and a similar share anticipating no reductions.
  • Boston Fed President Susan Collins expects at least one rate cut in 2025, even as markets assign only about a 15% chance of easing at the July 30–31 meeting.