Thu, 31 Jul 2025

Thu, 31 Jul 2025 Fed holds interest rates steady despite Trump pressure

But support for a cut may be widening, as debates rage about how tariffs will affect the US economy.

* The US Federal Reserve has maintained its interest rates at a range of 4.25-4.5%, despite pressure from President Donald Trump to lower borrowing costs.
* This decision was widely expected, but two members of the Fed's board voted against it, suggesting that support for rate cuts may be growing.
* New economic data shows the US economy grew at an annual rate of 3% in April-June, rebounding from a contraction earlier in the year.
* However, this growth is largely attributed to a drop in imports due to Trump's tariffs, and experts warn that this trend may not continue.
* The Fed has been cautious about cutting rates, citing concerns over inflation (currently at 2.7%) and the potential impact of tariffs on the economy.
* Federal Reserve Chair Jerome Powell defended the decision, arguing that waiting is necessary given the uncertainty surrounding trade policies.
* President Trump remains critical of the Fed's stance, calling for lower interest rates to boost economic growth and save government money on debt payments.
* Analysts warn that delaying rate cuts may lead to cracks in the labor market, where job creation has weakened despite a low unemployment rate.
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