Fed Holds Interest Rates at 4.25%-4.5% Despite Two Dissents

Federal Reserve Chair Jerome Powell decided to keep interest rates steady at 4.25%-4.5%, despite strong economic indicators such as 3% GDP growth, low inflation, and rebounding consumer confidence, drawing sharp criticism from President Donald Trump and dissenting votes from two Fed governors for the first time in decades. Governors Christopher Waller and Michelle Bowman dissented, advocating for rate cuts due to controlled inflation and potential labor market weakening, signaling internal Fed disagreement and challenging Powell's cautious stance. Powell emphasized uncertainty and data dependence, refusing to commit to a September rate cut and acknowledging risks from tariffs and slowing consumer spending, while maintaining the goal of balancing price stability and employment. Critics argue Powell's inflation forecasts have been overly pessimistic compared to actual data, and some see the Fed's rate policy as unnecessarily restrictive, potentially hindering economic growth favored by the Trump administration. Additionally, Powell's silence on his future as Fed Chair fueled speculation around central bank leadership and market impacts, as President Trump has publicly pressured him to step down. The ongoing tension highlights a complex dynamic between the Federal Reserve's monetary policy decisions and the administration's economic objectives.