0
U.S. President Donald Trump visits the Federal Reserve headquarters in Washington on July 24, accompanied by Fed Chair Jerome Powell. / Reuters-Yonhap

The U.S. Federal Reserve kept its benchmark interest rate unchanged at 4.25–4.50% on July 30, marking its fifth consecutive rate hold under President Donald Trump’s administration.

The decision, announced after a two-day Federal Open Market Committee (FOMC) meeting, saw nine members, including Fed Chair Jerome Powell, vote for a hold. Vice Chair Michelle Bowman and Governor Christopher Waller called for a 0.25 percentage point cut, while Governor Adriana Kugler was absent. This marked the first time since 1993 that two Fed governors voted against a rate decision.

The Fed noted that "unemployment remains low, labor market conditions are solid, and inflation is still somewhat elevated," while emphasizing that economic uncertainty remains high.

The FOMC statement also signaled a slightly less optimistic view than in June, saying recent data "show that economic activity growth has moderated," contrasting with the previous assessment that the economy was "expanding at a solid pace."

Speaking at a press conference, Powell said the Fed is "well-positioned to observe more about the expected path of the economy and evolving risks before adjusting policy," adding that the current stance is "appropriate to guard against inflation risks."

On tariffs imposed by the Trump administration, Powell noted that while "higher tariffs are starting to show up more clearly in certain prices," their overall effect on inflation and economic activity remains to be seen. He warned that tariffs could lead to "more persistent" inflation changes if expectations become unanchored.

President Trump has repeatedly urged Powell to cut rates, citing the need to ease Treasury interest burdens and boost the economy. Hours before the announcement, Trump wrote on Truth Social that the stronger-than-expected second-quarter GDP growth of 3% underscored the need to "cut rates now."

The Fed’s move highlights growing dissent within its board, as Bowman and Waller—both considered potential successors to Powell when his term ends in May—pushed for cuts, reflecting increasing pressure amid political demands and mixed economic signals.