FOMC Meeting Today: Powell Pauses as Tariffs Cloud Rate Outlook

The FOMC meeting today marks a pivotal moment in U.S. monetary policy as Federal Reserve Chair Jerome Powell held interest rates steady for the fifth consecutive time, despite mounting pressure from the White House and growing economic headwinds. 

With tariffs threatening inflation, internal Fed dissent emerging, and economic data showing both resilience and fragility, Powell's decision reflects a cautious “wait-and-see” stance. 

The Fed’s benchmark rate remains at 4.25%–4.5%, as traders, economists, and policymakers brace for clarity on what comes next—especially in the September 2025 Fed meeting.

Powell Rate Decision: Why the Fed Held Its Ground

In today’s Fed policy update, Powell emphasized that the central bank needs more time and data before making further adjustments. 

Despite calls from President Trump and two dissenting Fed governors—Michelle Bowman and Christopher Waller—to begin cutting rates, the Fed maintained its “modestly restrictive” policy stance.

“We are well positioned to wait and see,” Powell said in his press conference, reiterating that decisions will be data-driven and that the Fed interest rates will only shift once inflation and employment dynamics become clearer.

This move sent mixed signals to markets: the Dow dipped slightly, while the Nasdaq gained. Treasury yields rose modestly as investors recalibrated expectations.

Read Also: FOMC Meeting Forecast: Can Crypto Keep Its Rebound Going?

Tariff Impact on Fed Policy and Inflation Outlook

At the center of today’s decision is the growing uncertainty caused by Trump’s tariff strategy. New levies on imports from South Korea, Brazil, and India—some reaching as high as 50%—are beginning to seep into consumer prices.

Powell acknowledged the tariff impact on the Fed’s inflation outlook, stating that while some goods are already showing price hikes, the full effects remain uncertain. 

“There is a possibility that inflationary changes will be short-lived,” Powell said, “but persistent effects can’t be ruled out.”

The US inflation outlook continues to complicate policy responses. June’s inflation came in at 2.7%, above the Fed’s 2% target. With tariffs still ramping up and inventories dwindling, companies may soon be forced to raise consumer prices, potentially further fueling inflation.

Political Pressure and Fed Independence

The FOMC meeting today occurred amid escalating political friction. President Trump has repeatedly accused the Fed of “strangling growth,” pressuring Powell to deliver deep rate cuts. Trump even suggested that the Fed’s refusal to cut was sabotaging economic recovery.

Despite this, Powell defended the central bank’s independence. “Our policy stance is informed by data, not politics,” he said. 

Nonetheless, the growing influence of Trump-appointed governors—especially dissenters Bowman and Waller—raises concerns about potential politicization of the Fed.

Trump’s visit to the Fed’s headquarters last week, although dubbed a “nice visit” by Powell, added symbolic weight to the administration’s campaign for looser monetary policy.

Read Also: Jerome Powell Faces Pressure as Trump Reshapes the Fed

A Historic Split Vote Inside the Fed

For the first time since 1993, the Fed saw a split vote, with two officials voting against holding rates steady. Bowman and Waller argued that cutting rates now would preempt labor market deterioration and mitigate tariff shocks.

Waller, a potential successor to Powell, warned that the Fed risks being too slow. “We should not wait until the labor market weakens,” he stated.

Other members disagreed, citing still-elevated inflation and stable employment. Job openings data released Tuesday suggested that while hiring has slowed, layoffs remain low—a sign of underlying strength.

Take your crypto knowledge to the next level with fresh insights, market trends, and expert tips. Head over to the Bitrue Blog now and stay one step ahead.

September Rate Cut? Markets Look Ahead

Though no rate change came today, traders and analysts now turn to the September 2025 Fed meeting. According to CME’s FedWatch, there’s a 66% chance of a rate cut next month, contingent on July and August data.

Jerome Powell offered no firm guidance. “We have made no decisions about September,” he said, reiterating the Fed’s meeting-by-meeting approach.

Upcoming indicators—including Friday’s July jobs report—will likely play a major role in shaping the Fed’s next steps. JPMorgan’s David Kelly believes inflation will worsen in the near term, making rate cuts harder to justify.

Meanwhile, analysts say Powell may start to more explicitly define the Fed’s conditions for easing, though any concrete policy shift is unlikely until after the next batch of economic data.

Read Also: Federal Reserve Removes Reputational Risks from Bank Reviews! Is This A Bad Sign?

What This Means for Borrowers and Savers

The Fed’s decision to hold rates steady means borrowing remains expensive—with mortgage rates above 6.8% and credit card APRs near 20%. However, savers continue to benefit from higher yields, with CD and savings account rates outpacing inflation.

“It’s not a good time to be a borrower,” said Bankrate’s Greg McBride. “But it’s a great time to be a saver—lean into that.”

Read Also: Federal Reserve's Fed Rate Decision: Why It Stays Unchanged

Conclusion

The FOMC meeting today reinforced Powell’s commitment to data-driven policymaking amid a complicated and politicized economic backdrop. With tariffs clouding inflation, dissent among governors surfacing, and Trump applying open pressure, the Fed’s next moves will be closely watched.

Whether or not a rate cut happens in September may hinge on whether inflation proves to be sticky—or spikes again. One thing is clear: Powell has chosen patience over panic.

Maximize your potential and minimize the guesswork with reliable insights and expert content. Discover what’s next on your crypto journey at Bitrue, register now!

FAQ

What was the outcome of the FOMC meeting today?

The Fed kept its benchmark rate unchanged at 4.25%–4.5% for the fifth straight time.

Why did the Fed hold rates steady despite economic pressure?

Chair Powell cited ongoing inflation concerns and uncertainty caused by tariffs, emphasizing a need for more data before making changes.

Who dissented in the Fed vote and why is it significant?

Michelle Bowman and Christopher Waller dissented, calling for a rate cut. This is the first dual dissent since 1993.

Will the Fed cut rates in September 2025?

It’s uncertain. Market odds suggest a 66% chance, but Powell has made no commitment, waiting for incoming inflation and jobs data.

How do tariffs affect the Fed's interest rate decisions?

Tariffs can push up prices and distort inflation data, complicating the Fed’s task of managing stable prices without stifling growth.