Fed Ends July 2025 Meetings Holding Rates at a 4.25/4.50 Fed Funds Target - 2025

Nine voting members were in favor of keeping rates on hold.

Two Fed governors, Christopher Waller and Michelle Bowman, voted to lower rates by 25 basis points.

The Fed statement indicates that it still sees high uncertainty from tariffs, and that it remains attentive to both sides of its mandate.

Powell remains particularly concerned about the one-off effect of tariffs on inflation.  While corporations may say that they are attempting not to pass through the costs of the tariffs, these tariffs represent a level of charges on foreign produced goods that the US hasn't experienced since World War II.  Powell indicated in his press conference that the Fed's actions in maintaining the Fed funds rate at the current level is for the purpose of responding to any increase in consumer pricing in a way that ensures that any pricing adjustment does not become a sustained feature of the US economy.  Reading between the lines, one could assume that the Fed may still need to raise rates as part of this cycle.

Economists polled immediately after the release believe that there is a roughtly 38% chance of a quarter point cut in September.  

Powell also spent time in his press conference indicating that an independent Federal Reserve has served the country well, and that he appreciated President Trump's visit, but sees no need to remove the independence of the Fed.