during a meeting Last week between President Trump and Federal Reserve President Jerome Powell, tried to underline what the President said, which he said that “very simple” request is: “Interest rates have declined.”
This wish cannot be given when Fed announced his next interest rate decision on Wednesday. According to the factset, economists kept the central bank holding rates stable at 96%. Fed has maintained its benchmark rate in the range of 4.25% to 4.5% since December 2024, before the inauguration of Mr. Trump’s second term in January, because policy makers try to drown the coal of the flicker of inflation.
Mr. Trump is for months Pavail Caution of Fed in reducing the cost of borrowing, which experts say that will promote economic growth, but consumer may provoke prices. Increasing the pressure, Trump administration officials have also said that the fed chair handline Renewal of building The fed may have a ground for firing.
Despite such criticism, Powell has maintained its stand No immediate rate cut It is necessary that the economy remains solid. Fed Chair, which Mr. Trump Nominated To lead the Central Bank in 2017, it is also suggested that it wants to keep his powder dry in the case of Trump administration. Create new tariffs The reason for the rule of inflation.
“With the July 24 research note, Oxford Economics chief American economist Ryan Sweet said,” With the impact of the Labor Market and tariff on inflation, the Federal Reserve has a lot of pilgrims to justify keeping interest rates unchanged in the July meeting. ”
In making his case to reduce interest rates, Mr. Trump has Pointed to rate cut Earlier this year by the European Central Bank and Bank of England, while it was also indicated that US inflation has been relatively low in 2025 so far.
However, consumer price index – a major gauge to monitor inflation – increased to one in June annual rate 2.7%, above the 2% annual target of the Fed and a sign that tariffs can push some prices more.
Fed policy makers are meeting this week, to discuss what to do at interest rates. What do you know here.
When is Fed deciding to cut its rate?
The Federal Reserve will deduct its next rate in ET at 2 pm on Wednesday, July 30, followed by ET press conference with Powell at 2:30 pm, when it will present his view on the economy situation and answer questions from financial journalists about Fed’s economic approach.
Who decides on interest rates?
The decision is made by the 12-person Federal Open Market Committee, or FOMC, in which the voting majority decided that the central bank should cut, increase or maintain benchmark rate. In other words, no person, including Fed Chair Powell, determines the monetary policy of the Central Bank.
Recently, at least two members of the FOMC – Federal Reserve Governor Christopher Waller and Michelle Boman – have indicated their belief that it is time to cut rates.
,[I]F was a pair of disintegration in July, it would match the most since 1993, “Sweet of Oxford Economics noted ..” From our perspective, dissatisfied is normal and a good thing because it exposes that the fed is not falling into the group’s net. ,
Did Fed cut rates on Wednesday?
This is not impossible, but not extremely likely. According to the factset, economists estimate the possibility of cutting a rate of only 4%. CME Fedwatch, A closely seen monetary policy tracker suggests only a very remote possibility of a cut.
For now, data continues, if slow, economic growth, slow, economic development, with employers in June Hiring more workers than forecasting And inflation is relatively silent. Economists hopes that on Wednesday, the Commerce Department reported that the second quarter GDP increased by 1.8% at a rate of 2.8% in 2024.
With economic clouds on the horizon, the fed is expected to stop the cutting rates, so that if the situation deteriorates, the economists paid attention to them to place maneuvers.
Interest rates are the most powerful tools of the fed that are meant to advance growth when the economy slows down and cools when inflation jumps. A rate growth becomes more expensive for consumers and businesses for borrowing, curbing expenses and braking on inflation. Conversely, cuts are cheaper to borrow, spend and fuel corporate investment, which can spark inflation.
“Policy makers are cautious, navigating the risks of inflation, business policy as well as cooling labor market status as well as increasing political pressure from business policy and administration,” said Gregory Dako said in an email, “the main economist of I-Points Gregory Dako said.
How did Powell react to Mr. Trump’s pressure?
Powell repeatedly stated that the Federal Reserve decisions are completely based on economic data as it pursues its double mandate to keep inflation low and ensure complete employment.
Because Mr. Trump is insisting on low rates, Powell is likely to face questions about political pressure in his press conference on Wednesday. Pavel can also be asked about the President’s comment Place his place as a fed chairHe said. The current word of Powell as a chair ends in May 2026.
“There are obstacles that [Powell] Sticks with his mantra that it does not affect the monetary policy and he is not resigning by dodging questions about a shadow -fed chair, “Sweet said, referring to the possibility that Mr. Trump decided to nominate Powell’s successor to months, before he should be because of his expectations to affect the expectations for the monetary policy.
When is the fed the possibility of low interest rates?
According to the factset, Fed is more likely to reduce its benchmark rate in 16–17 meeting, according to the factset, economists increased the possibility of deduction of 63%. FOMC is not available in August, thereby the next chance to cut the September meeting rate.
Economists predicting the rate cut in the September meeting are estimating a decrease of 0.25 percent, which will take the rate of federal funds from 4% to 4.25%.
“There is no need to do any adjacent work .. Fed will probably wait by September to distribute the next 25 [basis point] Rate cut, “The bandits said.” We expect a two -rate cut in 2025, followed by the economic and labor market situation deteriorating more in 2026 after reducing another 100 BPS. ,
