Fed Holds Rates, Highlights Inflation and Dissent

The U.S. Federal Reserve kept its benchmark interest rate unchanged at 4.25%-4.5% for the fifth straight meeting, despite President Trump's renewed calls for rate cuts. The decision came amid mixed economic signals, with June's PCE inflation at 2.6% year-over-year, second-quarter GDP growth at 3%, and slightly higher weekly jobless claims. Two Trump-appointed Fed governors dissented in favor of a rate cut, marking the largest internal disagreement in over 30 years and raising concerns about political pressure on central bank independence. Fed Chair Jerome Powell stressed a data-driven approach and ongoing uncertainty from tariffs and trade policy, with no decision made for a September rate move. The Fed's stance influenced other central banks, including the UAE and Bank of Japan, which also opted to hold rates. Treasury yields fell as investors reacted to the inflation data and the Fed's cautious tone.