Key Facts
• On July 30, the Federal Reserve (FRB) kept interest rates at 4.25–4.5%.
• This marks the fifth consecutive meeting since January with no rate cuts.
• June U.S. Consumer Price Index rose 2.7% year-on-year, exceeding the previous month.
• Inflation risks stem from companies passing tariff costs to retail prices.
• FRB Chair Jerome Powell warned of intensified price adjustments by businesses this summer.
• FRB implemented a 1% rate cut over three meetings starting September 2024.
• Since January 2025, under Trump’s second term, no further rate cuts have been made.
• Trump criticized Powell for resisting his demands for rate cuts, threatening dismissal.
Summary
The Federal Reserve (FRB) decided on July 30 to maintain its policy interest rate at 4.25–4.5%, marking the fifth consecutive meeting without a rate cut. This decision reflects concerns over inflation risks linked to the Trump administration’s tariffs, which have led to rising consumer prices as businesses pass on costs to consumers. In June, the U.S. Consumer Price Index increased by 2.7% year-on-year, continuing a two-month trend of accelerating inflation. FRB Chair Jerome Powell has expressed caution about the potential for further price adjustments by businesses during the summer. While the FRB implemented a 1% rate cut across three meetings starting in September 2024, it has refrained from additional cuts since January 2025, following the start of Trump’s second term. Trump has publicly criticized Powell for not complying with his demands for rate reductions, even hinting at dismissal. The FRB remains focused on carefully monitoring economic trends amid these challenges.
