Fed Holds Rates, Downgrades US Growth Outlook

The Federal Reserve kept its key short-term interest rate unchanged at around 4.3% for the fifth consecutive meeting, despite significant pressure from President Donald Trump to lower rates. For the first time in over thirty years, two Fed governors dissented by voting for a rate cut, highlighting concerns about persistent inflation and a slowing economy. Chair Jerome Powell stated that it may take months to fully assess the economic impact of recent tariffs imposed by the Trump administration. The Fed also downgraded its outlook for US economic growth, indicating policymakers may move closer to cutting rates if conditions deteriorate. Powell emphasized that no decision has been made about a possible rate cut in September. Financial experts expect borrowing costs to remain stable for now, though credit card rates remain high.