Fed holds interest rates steady. Will September bring a rate cut? Live updates

WASHINGTON – The Federal Reserve kept its key interest rate unchanged again and gave no signal it plans to lower rates in September despite mounting pressure from President Donald Trump and his appointees on the Fed’s policymaking committee.

The July 30 decision leaves the Fed’s benchmark short term rate at a range of 4.25% to 4.5% for a fifth straight meeting.

The Fed remains caught between its two mandates - maximum employment and stable prices. A slowing economy and job market in recent weeks has strengthened the case for rate cuts. But Trump’s tariffs began pushing inflation higher in June and forecasters expect larger effects in the months ahead, making officials wary of providing guidance to markets until the impact plays out.

President Donald Trump and Federal Reserve Chair Jerome Powell speak during a tour of the Federal Reserve Board building, which is currently undergoing renovations, in Washington, D.C. on July 24, 2025.

Yet two Republican Fed governors, Christopher Waller and Michelle Bowman, dissented, saying they preferred to trim rates. It marks the first time two governors have dissented from a Fed decision since 1993. Waller has said that while tariffs will likely nudge prices higher, he believes it will be a one-time hit and inflation should return to its prior level next year.

Both Waller and Bowman have been mentioned as potential candidates to be elevated by Trump to Fed chair when Powell’s term expires in May.

In a statement after a two-day meeting, the Fed said, “Uncertainty about the economic outlook remains elevated,” removing its prior assertion that uncertainty had diminished. That more optimistic tone came after Trump had paused many outsize tariffs for 90 days but a Friday negotiating deadline could reinstate many of the higher levies. The Fed also said “economic activity moderated in the first half of the year” – a downgrade from its previous description of growth as “solid” that at least could open the door to a September rate cut.

In June, Fed officials projected they’ll likely approve two quarter-point decreases this year, according to their median estimate. Futures markets, along with many economists, expect the first in September.

Trump has relentlessly tried to bully Fed Chair Jerome Powell into chopping rates dramatically and immediately– calling him “a numbskull,” “a moron,” and “too late,” among other epithets. But during a visit to the Fed last week he said he doesn't plan to fire him despite musing previously that he might do so. Fed experts have said a president can only remove a Fed chair for cause and Trump's repeated attacks threaten the Fed’s independence from politics.

Follow along for live updates. 

2 FOMC members voted against the decision 

Of the 12 voting members on the FOMC committee, 9 voted in favor of maintaining the target range for the federal funds rate at 4.25% to 4.5%. One was absent for the vote. Michelle W. Bowman and Christopher J. Waller voted against the action, preferring to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. 

It’s the first “double dissent” by Fed governors in nearly 32 years, according to Bankrate Chief Financial Analyst Greg McBride. 

“This will only add to the scrutiny and second-guessing of anything the Jerome Powell-led Federal Reserve says, does, or doesn’t do,” McBride said in a comment to USA TODAY. 

– Rachel Barber 

Trump calls stagnant interest rates an ‘amazing situation’ 

Trump called the Fed’s reluctance to cut rates an “amazing situation,” arguing that the U.S. should have the lowest global interest rate.  

“He's done a bad job,” Trump said of Powell shortly before the Fed's decision was announced. “I call him ‘Too Late.’ He’s always too late.” 

Trump said if interest rates are lowered, and inflation accelerates as a result, then the Fed should raise the rates again. 

“Well, if that happens, we just raise them. What you do is you lower them, and you see if there’s inflation,” the president said. 

– Bailey Schulz, Joey Garrison

Markets take Fed announcement in stride

Stocks were little changed after the Fed released its interest rate decision. The broad S&P 500 ticked up 13 points, or 0.2%, to about 6,383, while the Dow was virtually unchanged near 44,638. The Nasdaq Composite index added 87 points to trade near 21,186, a gain of 0.4%. The 10-year U.S. Treasury note, which is most likely to move in response to the Fed's decisions, was up about 2 basis points near 4.35%. Markets may be waiting for more information from Chair Powell's press conference, which begins shortly. 

– Andrea Riquier

Trump says he's still negotiating tariff hike with India

Trump said he's still negotiating with India and has not decided how much more the nation could pay on top of a 25% tariff that he announced earlier in the day.

"We're negotiating right now," Trump told reporters during a bill signing in the Roosevelt Room.

Trump in a Truth Social post said the country would pay an additional penalty for purchasing weapons and energy from Russia. He told reporters during the bill signing that India's participation in the BRICS economic group, which has discussed creating an alternative to the dollar, was also weighing into his decision making.

"We're not going to let anybody attack the dollar," Trump said.

Nations including India face an Aug. 1 deadline to cut deals with the U.S. or pay higher tariff rates. Trump told reporters that it doesn't "matter too much" to him whether there's a deal or not.

– Francesca Chambers

What time is the Fed announcement?

Powell will speak to reporters at 2:30 p.m. ET, shortly after the 2 p.m. ET rate decision announcement. You can watch the press conference live on the Fed's website.

– Bailey Schulz

Why does Trump want to cut interest rates now? 

Lowering rates could act as a short-term boost for the economy, bolstering U.S. manufacturing by creating cheaper exports through a weakened dollar and making it easier for businesses and consumers to borrow.  

"Let people buy, and refinance, their homes!" Trump said in a July 30 Truth Social post. The Fed can influence mortgage rates, but interest rate cuts won't always lead to cheaper home loans. USA TODAY has previously reported mortgage rates follow the path of the 10-year U.S. Treasury note, not the banking rates the Fed sets.

Two Trump-appointed board members, Michelle Bowman and Christopher Waller, have suggested the Fed should cut rates as soon as July, pointing to signs of a weakening economy.

"The economy is still growing, but its momentum has slowed significantly, and the risks to the FOMC's employment mandate have increased," Waller said in a July 17 speech.

During a June speech in Prague, Bowman said she believes tariffs' impact on inflation “may take longer, be more delayed, and have a smaller effect than initially expected."

But there are also concerns that cutting rates too soon could stoke inflation and hobble the economy more significantly in the long term. 

– Bailey Schulz, Paul Davidson  

Bessent says Fed misjudged tariffs 

Treasury Secretary Scott Bessent on July 30 suggested the Fed has overestimated tariffs' impact on inflation. 

Prices rose 2.7% in the 12 months through June, the highest annual inflation rate since February, according to the Labor Department. Some view the data as a sign that Trump's tariffs are starting to hit consumer prices, with apparel costs up by 0.4%, furniture prices up by 1% and toys up by 1.8%.

But Bessent argued tariffs should be considered a one-time price adjustment rather than inflationary, and suggested June's accelerated inflation could be a “rounding error” that may have stemmed from the dollar’s depreciation. 

Bessent doesn’t anticipate a July rate cut, but he said he hopes the Fed’s leadership will have “a little bit of imagination” when it comes to tariffs’ impact on the economy moving forward.

“I think they will see they were wrong on tariff inflation,” he said at an event hosted by Breitbart News, adding it’s “the lack of an open-mindedness that has frozen the Fed.” 

While tariffs’ impact on pricing has so far been mild, largely because retailers stockpiled goods before the new fees went into effect, economists expect to see more price hikes in the months to come as companies pass at least some of the tariff costs onto consumers.  

– Bailey Schulz 

Bessent: No reason to ‘panic’ if deals aren’t reached by Aug 1

Bessent said countries will still have an opportunity to negotiate new trade deals with the United States after the Aug. 1 tariff deadline.

Trump pointed to Aug. 1 as the marker for higher tariffs on goods from nearly 180 countries across the world to go into effect. But Bessent, speaking July 30 at a policy event hosted by Breitbart, said the deadline won’t end negotiations.

“If there’s not a deal by Aug. 1, I would encourage market participants, corporate America, even the countries, not to panic, because you can still do a deal,” Bessent said. “You’re just going to go back to your April 2 reciprocal tariff level.”

Steep "reciprocal" tariffs that Trump initially imposed on April 2 ‒ but soon after paused for 90 days amid market turbulence ‒ were set to go back into effect July 9. But Trump on July 7 extended the deadline to Aug. 1 to continue trade negotiations with some countries.

Since April, the Trump administration has imposed a 10% universal tariff on goods from nearly 180 nations.

– Joey Garrison

Bessent mocks critics for having ‘tariff derangement syndrome’

Bessent, in his remarks, also pushed back at critics of Trump’s tariffs who warned inflation would spike. Fed Chair Jerome Powell has held off lowering interest rates despite Trump’s demands because of inflation concerns from the tariffs.

“We’ve gone from Trump derangement syndrome to tariff derangement syndrome,” Bessent said.

Despite Bessent’s assessment, inflation accelerated in June, according to the Labor Department, with prices rising by 2.7% over the past 12 months. It marked the highest annual inflation rate since February.

– Joey Garrison 

Why did the Fed stop cutting interest rates? 

The Fed started to hike interest rates in 2022 amid rapid inflation, raising rates from nearly zero to a two-decade high of 5.25% to 5.5% in July 2023.  

Rates began to ease in 2024 as inflation softened, although the Fed slowed its rate cuts amid stubborn inflation and strong economic growth.  

– Bailey Schulz 

Stocks little changed as investors await Fed, afternoon earnings

U.S. stocks opened mostly higher but the Dow Jones Industrial Average wavered a bit as investors focused on a deluge of tech earnings. The S&P 500 was up 5 points, trading near 6,376 in early trade, while the Dow was essentially flat near 44,630. The Nasdaq composite, which is comprised of many of the titans of tech, jumped 48 points, or 0.2%, near 21,146. Meta, Microsoft, and Qualcomm are due to report quarterly results after the closing bell.

– Andrea Riquier

When is the next Fed interest rate decision? 

• Sept. 16-17 
• Oct. 28-29 
• Dec. 9-10 

– Bailey Schulz 

Fed rate cut odds

There’s a roughly 3% chance that the Fed announces a rate cut in July, according to the CME's FedWatch, a tool that measures interest rate traders’ expectations. 

A rate cut is more likely in September, according to FedWatch, with nearly 60% odds. Investors expect two rate decreases by the end of the year.  

– Bailey Schulz  

Fed interest rates chart

What interest rate traders think are the most likely ranges for the Fed’s interest rate after the next five policy-setting meetings, according to the CME's FedWatch. Numbers are accurate as of 5 p.m. ET on July 29.

– Jim Sergent

Why does the Fed adjust interest rates? 

The Fed adjusts interest rates to support its dual mandate of keeping prices stable and employment high. 

When inflation is high, the Fed can raise rates to make borrowing more expensive and cool economic activity. When unemployment is high, cutting rates can promote economic growth and hiring.  

– Bailey Schulz 

How is the job market today? 

Employers added a solid 147,000 jobs in June, but gains in recent months have been concentrated in health care, state and local governments, and leisure and hospitality. Forecasters surveyed by Bloomberg expect the U.S. to add 109,000 jobs in July, down from the monthly average of 130,000 so far this year. 

– Bailey Schulz, Paul Davidson 

How is the economy doing? 

Forecasters expect the economy to slow in coming months as Trump’s tariffs reignite inflation and sap consumer purchasing power. Less than 1% growth is projected in the third and fourth quarters, according to economists surveyed by Wolters Kluwer Blue Chip Economic Indicators.

– Bailey Schulz, Paul Davidson

How are tariffs affecting rate cuts? 

The Fed has refrained from cutting rates so far this year as tariffs spur economic uncertainty and increase the risk of inflation. 

Tariffs so far have had little impact on inflation, largely because companies stocked up on imported goods before the higher fees went into effect, but there are signs that Chinese-made products became more expensive in June. Still, many economists say the effects were mild.  

– Bailey Schulz, Paul Davidson

Trump says he’s not budging from Aug. 1 tariff deadline  

Trump reaffirmed on July 30 that he’s sticking to ‒ and won’t extend ‒ the Aug. 1 deadline for higher tariffs to go into effect on imports from across the world.   

“THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!” Trump wrote in a morning post on his social media app Truth Social. 

In recent weeks, Trump has sent letters to leaders of several countries alerting them to new higher tariff rates on their countries’ goods that will go effect Aug 1. His administration has also announced trade deals with the United Kingdom, Vietnam, Indonesia and the European Union. On July 30, Trump said he plans to impose a 25% tariff on imports from India and levy "a penalty" on the country for buying military equipment and energy from Russia.

Trump has taken an on-and-off-again approach to his tariff regime ‒ routinely threatening new fees on goods that he retreats from later. His past efforts have earned him a nickname among Wall Street financial analysts called "TACO trade," an acronym that stands for "Trump always chickens out." 

But Trump insists he won’t budge from Aug. 1.

– Joey Garrison 

Stock futures mostly higher on big day for markets

U.S. stock futures inched higher before the market opened on July 30, as investors await a slew of economic data and corporate earnings. Markets will get information on U.S. GDP, pending home sales, and private payrolls before the Fed announces its decision in the early afternoon. After the closing bell, tech heavyweights like Meta and Microsoft will share their quarterly results. 

At last check, futures linked to the S&P 500 were up 0.1%, near 6,415, while those for the Dow Jones Industrial Average were little changed at about 44,836. Nasdaq futures gained about 60 points, or 0.3%, to trade near 23,512. The 10-year Treasury note slid 9 basis points to about 4.33%.

– Andrea Riquier

What time does Powell speak today?

The Federal Reserve holds eight regularly scheduled meetings each year to determine monetary policy.  

This month's meeting takes place July 29 to July 30, and the Fed will announce its interest rate decision July 30 at 2 p.m. ET, followed by a news conference with Powell. 

– Bailey Schulz 

What is the current Fed rate? 

The benchmark federal funds rate has remained unchanged at 4.25% to 4.5% since December, when the Fed announced a quarter percentage point drop.   

– Bailey Schulz