Fed Keeps Rates Steady; Waller and Bowman Dissent 

The Federal Reserve kept the federal-funds rate unchanged at 4.25% to 4.50%, as widely expected. 

Federal Reserve Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman, who have both publicly called for a rate cut at the July meeting, dissented. This marks the first time two sitting governors have done so since 1993. 

While a few officials are pushing for immediate rate cuts, most policymakers continue to advocate a patient, wait-and-see approach. A major reason the Fed has kept interest rates unchanged throughout 2025 is the lingering uncertainty surrounding the inflationary effects of tariffs—even as the U.S. labor market remains solid. 

Moreover, newly released data from the Commerce Department showed the economy grew at a 3.0% annualized rate in Q2, marking a solid rebound from the 0.5% contraction in Q1. On the inflation front, signals were mixed. The GDP price index cooled to 2.0% from 3.8%, missing the 2.2% estimate. However, core PCE, the Fed’s preferred inflation gauge, printed 2.5%, down from 3.5% but still above the expected 2.3%.