Fed Holds Rates Steady Amid Internal Dissent, Powell Signals Caution on Future Cuts

The Federal Reserve maintained its benchmark interest rate at 4.25%-4.5% for the fifth consecutive meeting, defying market expectations of a cut. Two governors, Christopher Waller and Michelle Bowman, dissented—marking the first dual opposition in over three decades—as they advocated for a quarter-point reduction.

Chair Jerome Powell offered no clear guidance on a September rate cut, emphasizing data dependency. "We have made no decisions about September," he stated, while acknowledging the rare dissent as a sign of robust debate within the central bank.

The hold comes amid escalating trade tensions and political pressure, with the Fed's inaction reflecting a cautious stance toward inflationary risks. Market volatility may persist as traders recalibrate expectations for monetary easing.