The US Federal Reserve, which acts as the country’s central bank, kept the key rate at 4.25-4.5% per annum following a two-day meeting on July 29-30, despite calls from President Donald Trump to lower it. This was stated in a press release by the regulator.
This is the fifth meeting in a row when the rate has been left unchanged. In the press release, the regulator reported that although export fluctuations continue to affect the data, the latest statistics indicate that economic activity growth has slowed in the first half of the year. The unemployment rate remains low, and the situation in the labor market is stable. But inflation remains slightly elevated, and uncertainty about the economic outlook is high.
The Fed reaffirmed its commitment to the goal of returning inflation to 2% while maintaining the maximum level of employment. When making further decisions, the regulator will rely on incoming economic data.
Bloomberg notes that for the first time since 1993, two members of the Fed Board of Governors, Christopher Waller and Michelle Bowman, have spoken out against keeping the rate at the current level. The investment company B. Riley Wealth indicated that both of them are among the contenders for the position of the next Fed chairman.
Fed Chairman Jerome Powell said at a press conference that Waller and Bowman would issue a statement explaining their disagreement later, but most meeting participants still believe that a moderately restrictive monetary policy is needed at the moment.
The next Fed rate meeting is scheduled for September 16-17. Just over half of economists (56 out of 105) surveyed by Reuters predict a rate cut in September.
Earlier, The Wall Street Journal wrote that Trump has been considering removing Powell from office for the past few months. However, according to The New York Times, Trump has realized that an attempt to remove the Fed chairman could increase volatility in financial markets.
Jerome Powell has been the head of the US Federal Reserve since 2018, and has been a member of the regulator’s board of governors since May 2012. Trump has criticized him for several months, frustrated that the regulator has not lowered the key rate. Powell’s term as head of the Fed expires in May 2026.
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