US Fed News Highlights: Jerome Powell warns consumers will feel Trump tariff impact, holds rates steady at 4.25–4.5%

Asked if he plans to remain at the US Fed after his term as chair ends in May 2026, Jerome Powell said, "Sorry, I do not have any update for you." With his governor term running through January 2028, the lack of clarity leaves room for speculation -- especially amid ongoing pressure and criticism from President Trump.

Jerome Powell said the US Fed faces a tough balancing act between cooling inflation and preserving the labour market. "You’re being pulled in two directions... at some point, if they're equally at risk, then you really want to be at a neutral policy stance -- which we're not right now," he said.

Asked what could trigger a rate cut, Powell said the US Fed will assess the 'totality of the evidence' before its September meeting. Cutting too soon risks inflation resurgence, while acting too late could hurt the labour market, he said. 'Getting the timing right' is critical, he added.

“They’re not going to be zero cost. Consumers will pay some of this. Businesses will pay some of this. Retailers will pay some of this," the Fed chair said.

"If you were not to have that [independence], that would be a great temptation, of course, to use interest rates to affect elections, for example. And that's something that's something we don't want to do," he said.

US Fed Chair Jerome Powell stressed the importance of maintaining the independence of the central bank. He said that advanced economies have "chosen to put a little bit of distance between direct political control of those decisions and the decision makers."

“We had a nice visit with the President. It was an honor to host him. It’s not something that happens very often at the Federal Reserve to have the president come over, let alone to visit a building, but it was a good visit,” Powell said.

“On the dissents, what you want from everybody and also from a dissenter is a clear explanation of what your thinking is and what the arguments are you are making. We had that today,” Powell said at a press conference on Wednesday. “Basically this was a good meeting around the table where people thought carefully about this and put their positions out there," he added.

Powell said he and the majority of the FOMC believed that the current rate is “moderately restrictive,” and with inflation a bit above its 2% target, most committee members felt like higher rates were necessary to lower inflation, CNN reported.

“As I mentioned, the majority of the Committee was of the view that inflation is a bit above target, maximum employment is at target. That calls for moderately restrictive — in my way of thinking — moderately restrictive stance right now. We had two dissenters, and we want that expression of their thinking. We certainly had that today around the table.”

"We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments," he said.

"We have made no decisions about September. We don’t do that in advance," he said, adding that the Fed will weigh all incoming data before making its call at the next meeting.

"Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen," Jerome Powell said. He added that "a reasonable base case is that the effects on inflation could be short-lived, reflecting a one-time shift on the price level."

Fed Chair Jerome Powell highlighted steady job gains, low unemployment at 4.1%, and wage growth outpacing inflation as signs that the labour market remains 'broadly in balance and consistent with maximum employment'. He said this during his address shortly after Fed announced its decision to keep interest rates steady.

Fed Chair Jerome Powell, during his address, said that inflation 'has been running somewhat above our 2% longer-run objective', reinforcing the central bank’s cautious approach to keep the interest rates steady despite political pressure to cut.

While speaking about the economic developments, the Federal Reserve Chair Jerome Powell said indicators currently indicate a moderation in economic growth. He also attributed most of the slowdown to softer consumer spending. However, despite the cooling, the Fed chair noted that the unemployment rate remains low and that labor market conditions are now broadly in balance - hence the Fed decision to keep the rates steady.

Jerome Powell has offered no hints at any cuts to the existing interest rates even as pressure from US President Donald Trump mounts.

The US economy bounced back in the second quarter, with GDP expanding at an annual rate of 3%, according to new figures from the Commerce Department. The rebound follows a slight contraction in the first quarter, pointing to underlying economic strength. Still, the Federal Reserve has opted to keep interest rates unchanged and offered no clear guidance on when rate cuts might begin, maintaining a cautious stance. This has come despite pressures from US President Donald Trump.

Despite the US Fed’s lack of guidance, futures markets now price in a 68% chance of a 25 bps cut in September and a 65% chance of another in December, according to Reuters.

Despite robust economic growth and a tight labour market, the US Federal Reserve refrained from offering a timeline for future rate cuts. In its statement, the Fed noted that “the unemployment rate is low and labour market conditions are solid,” while also acknowledging that inflation “remains somewhat elevated.” The central bank’s cautious tone signals a wait-and-watch approach as it continues to monitor key economic data.

Ahead of the Federal Reserve’s policy decision, President Trump had dismissed concerns about potential inflation. “If that happens... you just raise them,” he said, referring to interest rates. Trump has previously called for slashing the benchmark rate to as low as 1% — a level that most economists believe is far too low given the current strength of the economy.

Just hours before the Federal Reserve’s interest rate decision, President Donald Trump had renewed his call for an aggressive rate cut. Pointing to better-than-expected second-quarter GDP figures, Trump criticised the Fed for maintaining what he views as unnecessarily high borrowing costs. “We should be the lowest interest rate. And we're not,” he said, taking a fresh swipe at the central bank's cautious approach.

For the first time in over three decades, more than one Federal Reserve governor has opposed an interest rate decision — a rare show of internal disagreement. The 9-2 vote reflects rising tensions within the central bank over the timing of future rate cuts, highlighting differing views on whether the economy is ready for a shift toward looser monetary policy.

The Federal Reserve’s decision to maintain current interest rates did not go uncontested. Fed Governors Michelle Bowman and Christopher Waller dissented from the majority view, voicing support for an immediate rate reduction. Both cited declining inflation and emerging signs of softness in the labour market as reasons to ease borrowing costs sooner rather than later.

Although the US Federal Reserve has chosen to keep interest rates unchanged, it continues to face growing pressure from President Trump and his supporters, who are urging a cut in borrowing costs. Fed officials, however, remain in wait-and-watch mode, seeking more concrete economic data before making any moves — a stance that’s drawing criticism as the trade war continues to cast uncertainty over the economy.

The Federal Reserve kept interest rates unchanged for the fifth consecutive meeting on Wednesday, leaving the benchmark rate at 4.25–4.50 percent. The move was widely expected as the central bank continues its wait-and-watch approach.

Just minutes before the Fed's decision on interest rates, US President Donald Trump said that Fed Chair Jerome Powell will likely not lower rates today, several media reports have said.

Stay tuned to see what the Fed's call is on interest rates.

US markets have been showing slight gains ahead of the Federal Reserve’s highly anticipated interest rate announcement, which is now just minutes away. With less than half an hour to go, the Dow Jones Industrial Average remained flat, while the S&P 500 edged up by 0.2% and the Nasdaq Composite saw a modest increase of 0.4%, led by strength in tech stocks.

Investors broadly expect the Fed to hold interest rates steady for now. But all eyes are on the details of the decision, including the voting pattern among FOMC members — any signs of disagreement or dovish dissent could influence market sentiment and forecasts for future rate moves.

Markets are also gearing up for Fed Chair Jerome Powell’s press conference at 2:30 pm ET where his tone will likely shape the next leg of the market reaction.

You can watch the July FOMC meeting live on the Federal Reserve Board of Governors’ YouTube channel on July 30 at 2 PM ET (which translates to 11:30 PM IST), followed by Powell’s press conference.

While inflation has cooled from its pandemic-era peak, the latest data suggests it’s not falling fast enough to convince the Fed to ease the interest rates aggressively. Officials remain cautious, even worried that cutting too soon might reignite price pressures, especially with a strong job market and rising consumer demand.

The Fed had begun slashing interest rates in 2024 as inflation showed signs of cooling. However, the momentum slowed as sticky inflation and resilient economic data prompted caution. After a sharp hike cycle that began in 2022 and peaked at 5.25%–5.5%, the Fed is now treading carefully, balancing growth with price stability, experts have said.

The Federal Open Market Committee (FOMC) is set to announce its latest decision on interest rates at 2:00 pm EDT, which translates to 11:30 pm IST. At its previous meeting, the Fed held the benchmark interest rate steady at 4.25%–4.5%. With inflationary pressures and global trade tensions in focus, market participants will be watching closely for any shift in the Fed’s stance.

US markets opened slightly in the green on Wednesday, with investors closely watching for the Federal Reserve’s interest rate decision tonight. The Dow Jones ticked up by 26 points, while the S&P 500 and Nasdaq saw gains of 0.1% and 0.2%, respectively. All attention is now on Fed Chair Jerome Powell’s press briefing at 2:30 pm ET, where analysts hope to get clarity on how the Fed views the economic risks posed by recent tariff moves.

Stay tuned for Fed's final call on interest rates.

Despite mounting pressure from President Trump to cut interest rates and step down, Federal Reserve Chair Jerome Powell reportedly remains firm. According to sources close to the matter, Powell has told allies that resigning is not an option —  and that doing so, he believes, would risk compromising the Fed’s independence. For Powell, staying the course is about protecting the central bank from political influence as much as it is about leading monetary policy, CNN reported.

Just hours before the US Federal Reserve’s policy outcome, President Donald Trump took to social media urging Fed Chair Jerome Powell to slash interest rates. “Must now lower the rate,” Trump posted, citing the need to support home buying and refinancing. His comments come on the heels of his announcement imposing 25% tariffs on Indian goods — a move that could further complicate the Fed’s inflation calculus.

"2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! “Too Late” MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!" he wrote on Truth social.

The US Federal Reserve is widely expected to keep interest rates unchanged at 4.25%–4.50% today — the level they have been at since December 2024. Several media reports indicate that markets aren’t expecting a rate move this time, but they’ll be watching every word of the Fed’s statement and Powell’s press conference for hints on when rate cuts might finally begin.

While recent US tariffs announced by US President Donald Trump haven’t yet driven up inflation, analysts have warned that price pressures could rise once these measures take effect in August. In its June meeting, the Federal Reserve revised its inflation outlook upwards, now projecting it to reach 3.1% by year-end - above current levels. This suggests that the Fed sees tariffs as a potential inflation risk. As a result, any hopes of near-term rate cuts may be pushed back but the decision remains to be seen today.

Ahead of the Fed's big decision on interest rates tonight, the latest US inflation data shows prices rose 2.7% over the past year (June 2024 to June 2025). This is a bit higher than the 2.4% rise seen the month before. Core inflation, which leaves out food and energy prices, was up 2.9%, showing that price pressures remain steady underneath the surface. Food prices went up 3.0%, while energy prices actually dropped by 0.8%. This slight rise in overall inflation could make the Fed cautious about cutting rates just yet. All eyes are now on what they signal next.

The Federal Reserve has two goals - to keep inflation low and stable and to ensure that there are maximum employment opportunities. As per data, right now, inflation in the US is showing a downward trend but is “not fast enough”. Meanwhile, job growth remains strong even though recent data has shown a slowdown in the job market. These have hence emerged as the potential reasons as to why the Fed is treading carefully before cutting interest rates.

The Fed’s last rate hike came in July 2023, bringing the federal funds rate to a peak of 5.25%–5.50%. It held steady at that level until December 2024, when the central bank delivered its first rate cut in the tightening cycle, lowering the benchmark rate to 4.25%–4.50%. That range has remained unchanged through the January, March, May and June 2025 meetings, as the Fed adopts a wait-and-watch stance amid evolving inflation and labour market data.

During the June 2025 meeting, which took place on June 18, the Fed decided to hold rates steady but signalled caution. After the meeting, officials cut short their rate-cut projections for the year from three cuts to just one, citing sticky inflation and resilient job growth as potential causes.

While all eyes remain on the Fed’s decision, most experts expect the central bank to maintain the status quo and keep rates unchanged for the fifth consecutive meeting - the same as it has remained since December 2024. However, the key question now is: When will the rate cuts begin? Markets are expecting potential rate reductions in Q4 2025, depending on inflation data and economic strength, in addition to the job market.