Fed Holds Rates, Signals Delay on Possible Cuts

The US Federal Reserve, led by Chair Jerome Powell, held its key interest rate at 4.25–4.5% for the fifth consecutive meeting, resisting President Donald Trump's calls for a sharp rate cut. Powell stated that the Fed needs to see more economic data, especially on the effects of Trump's tariffs on inflation, and signaled that any rate cut decision may be delayed until after September. Two Trump-appointed governors dissented in favor of a rate reduction, marking the first such double dissent in over 30 years and revealing internal divisions. Economic growth rebounded in the second quarter, but inflation remains elevated at 2.7%, above the Fed's 2% target. The decision renewed debate about the Fed's independence as Powell reaffirmed a data-driven approach and the central bank's autonomy. Financial markets, including cryptocurrencies, dropped sharply in response to the Fed's continued tight policy.