Divided Fed holds key interest rate steady, defying Trump's demands for aggressive cuts
Source: CNBC
Published Wed, Jul 30 20252:00 PM EDTUpdated 1 Min Ago
WASHINGTON – A divided Federal Reserve on Wednesday voted to keep its benchmark interest rate steady, despite a barrage of criticism from President Donald Trump and dissents from two top officials.
The Federal Open Market Committee, the group that sets the overnight borrowing rate, voted 9-2 to stay on hold. The federal funds rate will continue to be set in a range between 4.25%-4.5%. The level sets what banks charge each other for overnight lending, but influences a slew of other rates across the economy.
However, the decision met opposition from governors Michelle Bowman and Christopher Waller, both of whom have advocated for the Fed to start easing in acknowledgement that inflation is under control and the labor market could start weakening soon. This was the first time since late 1993 that multiple governors cast no votes on a rate decision.
The post-meeting statement offered only a couple changes in how the committee views economic conditions.
Read more: https://www.cnbc.com/2025/07/30/fed-leaves-interest-rates-unchanged-as-expected.html
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Last edited Wed Jul 30, 2025, 02:45 PM - Edit history (1)
My settlement just came through and I'm looking to put most of the funds back into my IRA where they came from.
I should be able to get something half-way decent in an IRA CD for the next 12 months.
1 Year
3.05% compounded = 3.10%
I realize its not great but its better than less if they were to cut rates!
Thank you for doing a great job Jerome Powell! 
Two Trump appointees.
I dissent. Last CPI report:
https://www.democraticunderground.com/10143496078
News report from the source: https://www.bls.gov/news.release/cpi.nr0.htm
CPI data series: https://data.bls.gov/timeseries/CUSR0000SA0
CORE CPI data series: http://data.bls.gov/timeseries/CUSR0000SA0L1E
I annualize everything to be comparable to each other and to compare to the Fed's 2% target
They are calculated using the actual index values, not from the rounded off monthly change numbers.
The CPI rise averaged 2.4% over the past 3 months on an annualized basis (core CPI: 2.4%)
The June one month increase annualized is: CPI: 3.5%, (core CPI: 2.8%)
REGULAR CPI
CORE CPI
Both the CPI and Core CPI 3 month rolling average were helped a lot when the huge January increases dropped out of the 3-month window, and were hurt a lot when the March decrease for the CPI and the tiny increase for the Core CPI dropped out of the window.
The rolling 12 months averages graphs are in the OP. They were hurt by last year's very small June 2024 month-over-month increases dropping out of the 12 month window. What drops out of the window is just as important as what enters the 12 month window (which is the latest, June 2025).
Some featured items from the BLS news summary https://www.bls.gov/news.release/cpi.nr0.htm
Increases in June over May:
Shelter: +0.2%, Energy: +0.9%, Gasoline: +1.0%, Food and food at home: +0.3%, Food way from home: +0.4%,
12 month increases:
Energy: -0.8%, Food: +3.0%
Bar graph of increases and decreases of various CPI components arranged from highest increase to lowest and then decreases, 12 month numbers (year-over-year)
https://finance.yahoo.com/personal-finance/banking/article/june-inflation-breakdown-consumers-feel-the-pinch-with-tariffs-looming-181129115.html
Household energy +7.1%
Auto insurance: +6.1%
Housing: +4.0%
Restaurant meals: +3.8%
. . .
Hotel rooms: -2.5%
Electronics: -3.3%
Airfare -3.5%
Gasoline: -8.3%
==========================================
We get a look at PCE inflation for June tomorrow, the Fed's favorite inflation gauge. I don't expect it to be as high as the CPI report was, because it seldom is. That's partly or mostly because the PCE is a "chained" index which means that, for example, if enough consumers switch from beef to turkey necks and other lower-cost kinds of meat, then it will show up as a decrease in meat prices in the PCE. That's because chained types of indices fully include substitution effects.
One other thing comes to mind: the PCE puts LESS weight on shelter than the CPI does. Shelter increases have been high relative to most other components, so this tends to make the PCE come out lower than the CPI.
The estimate for tomorrow's PCE June over May increases are +0.3% for both the regular and the core numbers (those are about 3.6% when annualized, which is kinda hot), but I doubt they will be that high, again because of the substitution effect.
when I decided to sub to MarketWatch, I went on and picked up Barron's too (at a discount with the MarketWatch). And per them, that plot is apparently done quarterly, with their Summary of Economic Projections report. The last report released was in June (6/18/25) (PDF) - https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20250618.pdf
So they are apparently released in March, June, September, December.
The tool is highly watched and frequently misinterpreted. Here's a complete guide.
By Molly Cook Escobar
Jun 18, 2025, 8:51 AM EDT
Where does the Federal Reserve see interest rates heading? You can find the answer yourself—if you know where to look.
The Federal Reserve's primary functions are to keep prices stable and maintain full employment. Adjusting interest rates is one way the central bank achieves those goals: Higher rates increase the cost of borrowing for Americans and businesses and tend to reduce demand, while lower rates can have the opposite effect.
Members of the Federal Reserve's policymaking arm meet eight times a year to potentially make changes to short-term rates based on trends in inflation, the labor market, and other aspects of the economy.
Four times a year, the group publishes its Summary of Economic Projections, which includes a chart that shows where each of the Federal Open Market Committee's 19 policymakers expect interest rates to be over the next several years and in the long term. Each member’s anonymous forecast is represented by a single dot, hence why it is called the Fed’s “dot plot.”
(snip)
Snapshot of one that the NYT had last month (for the 6/18/25 one) -
